Which Mortgage If I'm Planning to Move?

LittleMissGiggles_2

Help! My head is in a spin! I've just found out that I am paying 5.7% interest with my current mortgage provider. I regularly overpay (so would like to keep this facility), have a small mortgage (£37000) and want to save on a monthly basis and put the money into overpaying. Trouble is that we will probably look to move within the next twelve months (when I have persuaded hubby) so don't want to be stuck with £150,000 on a base rate!

I work for a large High Street Bank (sorry, it's paying the bills) and get a staff mortgage (BoE Base Rate) but I get taxed on this and would like to calculate how much I would pay in tax!

cattie

I intend moving next year & when my discount period ended I didn't want to have to pay any kind of penalty or fee on a new mortgage.

For me a discounted tracker mortgage from my existing mortgage provider proved to be the best & cheapest way forward.

This could possibly be the best thing for you & you can shop around for the cheapest fixed or discount deal once you are buying the next house.

Joe_Bloggs

I think you get taxed on the interest paid between the HMRC assumed rate of 5% and your current rate. Can anyone find any HMRC document to back this assertion for mortgages? If you are a basic rate payer then that is 20% of 0.5% of the interest paid per annum. So the effective rate is 4.6%. If you are paying more than 5% then it is untaxed. This is just a vague recollation of the situation as it relates to mortgages and employee benefits. Were this a joint mortgage and taxation rates of the participants were different then I have no idea. Perhaps an average of the rates on the benefit.

When you say 'base rate' I think you mean standard variable rate of a particular lender.

J_B.

LittleMissGiggles_2

I have gone with the staff rate as there are no early repayment fees, I can overpay and they pay all the remortgaging costs. Thanks for the info on tax rates.