The Mortgage Free in Three - Take 2 challenge (MFiT-T2)

weezl74

Jock_Tight wrote: »

Thanks!

With an offset mortgage you sacrifice the savings offset against the mortgage, thus our RBS savings account does not make any interest.

We have the full mortgage amount offset (~£40k) so we dont pay any interest on the mortgage. I'd need to check but I think the RBS mortgage interest is currently sitting around ~3.9% which is far higher than the savings rates currently available.

Also a large chunk of the money in the RBS savings account is a donation from a parent (which they get back) so we cant just pay the mortgage all off. However by the end of next year 'our' money will have been completely removed from the offset savings account (its being removed each month as we make a mortgage payment) and will be elsewhere making interest. The remaining 'gift' money offset against the mortgage means our mortgage is essentially an interest free loan :cool:

Jock_Tight

Thanks for that Jock, really useful. Was there any capital gains tax on the gift or are you allowed a certain amount from family? I'm thinking of suggesting a similar thing to our folks now

financialbliss

golfiematt wrote: »

thanks for registering me. good luck all on here!
ps. how do i make the mfit-t2, a link in blue on my signature

Edit your signature, click on "insert link" button and copy this into the text box:

<a href='http://forums.moneysavingexpert.com/showthread.html?t=1402631'>MFiT-T2 Challenge</a>

The 'MFiT-T2 Challenge' is the text that will be displayed and can be changed if required.

The href is the address of the page in the forums.

Works for any address and I use this in the diary links on page #1.

Thanks,
FB.

RosieTiger

Scad wrote: »

Bad news guys. I've been made redundant and had to take a lower paid job.

I'll need to review my target to £118,000!

Sorry to hear this, hope things pick up for you quickly

debt_free_gonnabe

Evening all

New to this site this eveing and would love to join this if that's ok

Target of clearing a whopping £50,000 off my mortgage

Come On !!!!!!!!!!!!!

Jock_Tight

weezl74 wrote: »

Thanks for that Jock, really useful. Was there any capital gains tax on the gift or are you allowed a certain amount from family? I'm thinking of suggesting a similar thing to our folks now

This is a bit of a grey area! There is a limit you can pass to children/grandchildren for tax purposes in one year. This money is sitting in an account and is not being used by us and we dont gain any interest on it. When the mortgage is finnished we will pay the money back. As all transactions are traceable, the tax man would be able to see the money was paid in then paid back and we have not 'gained' as such. We are not hidding anything, all in the open and clear to see.

One of my mates did a similar thing, his parents sold one of their properties and they moved the money (all of it!) into his offset savings account then removed it several months later. He made a whopping interest saving on his mortgage and the tax man never batted an eye lid!

JonnyBravo

Jock_Tight wrote: »

This is a bit of a grey area! There is a limit you can pass to children/grandchildren for tax purposes in one year. This money is sitting in an account and is not being used by us and we dont gain any interest on it. When the mortgage is finnished we will pay the money back. As all transactions are traceable, the tax man would be able to see the money was paid in then paid back and we have not 'gained' as such. We are not hidding anything, all in the open and clear to see.

One of my mates did a similar thing, his parents sold one of their properties and they moved the money (all of it!) into his offset savings account then removed it several months later. He made a whopping interest saving on his mortgage and the tax man never batted an eye lid!

And he won't so long as the money isn't followed by a death within seven years. If the worst happened and the person who has "lent" you the money died you may have to pay inheritance tax.

Jock_Tight

JonnyBravo wrote: »

And he won't so long as the money isn't followed by a death within seven years. If the worst happened and the person who has "lent" you the money died you may have to pay inheritance tax.

Thanks :T

As for the MFiT I calculated last night that when the mortgage is paid off the extra cash through not paying the mortgage+overpayments is like a 38% pay rise! :j

SparkleBlack

Jock_Tight wrote: »

As for the MFiT I calculated last night that when the mortgage is paid off the extra cash through not paying the mortgage+overpayments is like a 38% pay rise! :j

I'd never thought of being MF in that way and I like it! Think I might go work out what my "payrise" would be

deefadog

Mines 48% payrise

scottiedog

Hello everyone can I join please?
I have been following this MFW thread for about a year now. We cashed in some off our savings to throw at the mortgage and have overpaid for 10 off the last 12 months. We have reduced our mortgage from £66000 to 49500 in the last year - and that in itself is a fantastic feeling. We won't be able to pay anymore from our savings towards the mortgage because we are keeping that as a buffer incase of illness/job loss/ emergencies etc. So I think by joining this thread it will be the incentive I need. I hope to have cleared the mortgage by the end of 2012 - with a lot of hard work.

Scottiedog