Scottish Student Loan for Mortgage

ScottishUni

Scottish Student loan for mortgage advice.

My son will be going to Strathclyde University next year and I want to set him up for the future with the best advice/guidance as possible.

As a household we earn just under £100000 a year so believe he will be eligible for an £8400 student loan each year for 4 years whilst he's there (£33600 in total). He will be studying Computing Science with Maths.

He will be living at home and will have a part time job so will never actually need the student loan but I believe he could invest £4000 of the loan each year in to a LISA earning him an extra £4000 over this time with the 25% government insensitive. (Not including interest).

The rest could be invested in to premium bonds and continuing to withdraw the rest of the initial loan for 9 years in total (or less if he wants to get a home for himself sooner). I have worked out (with AI's help) the total savings including the initial loans would be roughly £49000 which could then be used as a mortgage deposit.

I'm looking for a downside but struggling to find one. Is this a sensible option or have I lost the plot and giving my son trouble for the future taking out these loans? (Obviously it's his decision and I'm just giving him my tuppence worth)

silvercar

The downside is the interest on the loans could mean that he pays more interest than he would on a mortgage. But it does give him some capital for a deposit and the 25% return on a JISA is attractive.

Hehaw2025

My partner did near enough similar, she worked during uni, stayed at her mum & dads and used her student loan to max out her LISA. She had near enough £25k for a house deposit when she graduated.

I would say do it, if your son finishes uni and doesnt get a decent paying job straight away he at least will have a good chunk saved up for a deposit.