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Staff Mortgage Maths!
MrsCroyde
Posts: 3 Newbie
Hoping someone is able to help me here - Maths has never been my strong point!!
I've been on a staff mortgage for years and have a ridiculous tax code because of it, but now exploring whether to remortgage onto a normal rate.
I've got a mortgage of £390,000 on a rate of 0.75%. I'm a higher rate tax payer, so not sure what BIK tax I am actually paying against the HMRC official rate of 3.25%.
If anyone is able to explain or help me with the maths I would be most grateful!
Thank you in advance
I've been on a staff mortgage for years and have a ridiculous tax code because of it, but now exploring whether to remortgage onto a normal rate.
I've got a mortgage of £390,000 on a rate of 0.75%. I'm a higher rate tax payer, so not sure what BIK tax I am actually paying against the HMRC official rate of 3.25%.
If anyone is able to explain or help me with the maths I would be most grateful!
Thank you in advance
0
Comments
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£390,000 x 3.25% = £12,675 what HMRC deems your loan cost.
£390,000 x 0.75% = £2,925 what your loan actually costs.
£12,675 - £2,925 = £9,750 benefit in kind.
£9,750 x 40% = £3,900 tax payable.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Stay on that rate...it's a good rate.:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
kingstreet wrote: »£390,000 x 3.25% = £12,675 what HMRC deems your loan cost.
£390,000 x 0.75% = £2,925 what your loan actually costs.
£12,675 - £2,925 = £9,750 benefit in kind.
£9,750 x 40% = £3,900 tax payable.
Superb! Thank you ever so much, you will not believe how long it's taken me to try and work that out (needless to say, my figures were well off!!)
Thank you, very much appreciated.0 -
kingstreet wrote: »£390,000 x 3.25% = £12,675 what HMRC deems your loan cost.
£390,000 x 0.75% = £2,925 what your loan actually costs.
£12,675 - £2,925 = £9,750 benefit in kind.
£9,750 x 40% = £3,900 tax payable.
£2,925 + £3,900 = £6,825 total cost
£6,825 / £390,000 = 1.75% equivalent interest rate
Can you beat that rate elsewhere? Looks pretty good to me
Brighty0 -
Based on the figures from KS, your rate is effectively 1.75%I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thank you Brighty and amnblog, that's brilliant. Often wondered what the rate would equate to - can't say I can beat that anywhere??0
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