Pension mortgage

Supernova

I understand that you can use a pension to pay off the mortgage.

From what I can gather that means that over 50 I can draw 25% of the fund tax free so I'd have to have £235,000 to pay off my £56,750 mortgage in 6 and a half years time.

That will pretty much apply only to my occupational scheme which I can boost by £25K with the proceeds from a failing endowment but I don't think I'm allowed to draw on it whilst working for them. Even as an HRT I don't think there's time to build a sufficient fund elsewhere.

I'm not sure it's suitable for me but I thought I'd ask about the rules to discount it completely.

TIA

Paul_Herring

Supernova wrote:

From what I can gather that means that over 50 I can draw 25% of the fund tax free so I'd have to have £235,000 to pay off my £56,750 mortgage in 6 and a half years time.

It depends on whether the commencement lump sum remains at 25%, and remains tax free in 6 years time/after you become elegable for the CLS.

EdInvestor

This is not advisable: it's too risky because the rules might change and lock your money in, also you need that money for your retirement.

Use the endowment proceeds to reduce the mortgage amount owed now and increase the monthly mortgage payment by the endowment premium so you are further overpaying the mortgage. Any shortfall should be covered by extending the term or further increasing the payment.

I doubt it's worth remortgaging as the amount is so low though you could also look around for a good offset deal if you wanted more flexibility.

If appropriate, also consider making a misselling claim.

Supernova

OK, fair dos.

I didn't think it was a goer.