Savings/loan/Mortgage question..

Moneynovice

If I get a 25k advance on my mortgage 2.69% fixed for two years added onto my mortgage and a personal loan 15k at 3.9%

Can I put the total amount in my son's (he's 10) bank account and earn interest - it's a children's account.

The money is to fund a house extension next year - a bigger bedroom for my son.

This sounds like a good idea in my head but is it allowed or have I had too much wine this evening?

any help welcome, thanks

[Deleted User]

No. The taxman would be rather angry.

Pixie5740

Once it is in your son's account does it not become his money?

Brock_and_Roll

If I were the son, I would lend it back....at 9.9%* (*subject to credit, typical APR) !!

Moneynovice

Thanks for replies, I definitely don't want to make the tax man angry..What would the tax man take if it went into a current account? if the money goes into my sons account yes it becomes his money, then he can use it to build his bigger bedroom..he's 10...

I'm thinking if the mortgage advance is given to me at 2.69% and i put it in a current account at 5% I make money if i leave it there for a year? am i missing something?

slopemaster

Moneynovice wrote: »

am i missing something?

Where are you going to find a current account paying 5% on any more than a small amount?

slopemaster

And, as far as the taxman being angry - I seem to remember that interest on money a parent gives to a child is taxed as if it belongs to the parent anyway. (Not certain of this, you wd need to check.) But yes, if you can get more interest by putting it in his a/c, seems like a good plan.

Moneynovice

Lloyds offer 5% on current account for 5k so i was thinking of putting it in 5 different accounts.

slopemaster

They won't let you have 5. I don't think.
I did manage to get 3 at one time, but I think even that's difficult/impossible now.
And, in order to get the interest, each one has to have 2 direct debits going out every month, which makes it logistically a bit of a pain to set up. (as well as the minimum funding requirement which is easy enough by rotating standing orders)

slopemaster

Go over and have a look on the savings board and you should find a huge thread about it

foxy-stoat

Why not save £450 a month for 12 months and then borrow £5,000 less when you actually need the money?

Assuming you have already been offered and accepted an advance on your Mortgage at 2.69% and already been approved for a personal loan at 3.9%.