Mortgage for school fees?

lassie002

My daughter has been lucky to be offered a scholarship at an independant school. :T

Unfortunately, I can't afford the remainder of the fees out of income, but my house is mortgage-free.

Is it possible to take out a new mortgage for school fees? Or is there a better alternative?

Dave_Ham

So long as you can afford the repayments and have suitable credit score, income etc. then yes you can.

I fear you are going to pick up some negativity on the purpose of the mortgage from some on here, but subject to the above you can raise the funds.

Wh05apk

Potentially yes, subject to the lenders criteria.

Presumably it will be a relatively small amount, so look for a fee free deal with free legals and valuation, otherwise the costs represent a large proportion of the mortgage amount.

kingstreet

Presumably, you are going to have to raise funds to cover a number of years?

I suggest you consider an offset account. You can put the future years' payments in there and offset the interest until such times as you need the money.

Thrugelmir

No negativity towards the use of funds. As there's always the secured loan option.

More an issue as to whether lenders wish to use funds allocated to mortgages for such a purpose. May depend on the amount requested. As might not be profitable enough to warrant .

opinions4u

Not an uncommon reason to raise capital.

Look at offset or drawdown options.

liubeliu

I am assuming your daughter got the scholarship based on academic performance in the entrance exam.

It is not uncommon to apply for a means tested bursary with the school as most Indie Schools want their education available to those that are academically able but whose financial situation would otherwise exclude them.

I know of people whose kids have both a scholarship and bursary which amount to 100% of the fees. It is worth enquiring.

Scholarship's are a reward for academic, muscial or sporting excellance and Bursary is to enable those to access private education who would otherwise not be able to access it due to cost. Most Indie schools allocate around 10% of generated income into providing bursaries. It is not uncommon to be in receipt of both.

jamesml

As mentioned, don't forget future fees and any increases in fees if you can't get the bursary. Sounds like an offset is a great idea for this.