Staff Mortgage @ BOE Base Rate

dodgy_gooner

I am entitled to a staff mortgage at BOE Base Rate for the life of the Mortgage (4.75%) and will be moving from a First Direct Offset (5.75%) as I have now used up a large chunk of my savings so the offset is no longer good value. I know some fixed rates are better but I am not too keen on moving mortgages every 2 years or so.

Mortgage value will be about £70K

Any advice would be greatly received.

Thanks in advance.

Dodgy...

MortgageGenie

No margin over BOE for the life of the mortgage certainly sounds a good deal, does it have any tie in period? I'm no tax expert but you need to look carefully at the tax implication of a staff mortgage scheme.

If you don't want to have to remortgage every couple of years you could also look at longer term fixed rates like 5,7,10,15 years etc.

zag2me

Seems like a great deal to me. Remember Fixed rate mortgages usually have a high arrangment fee.

Rikki

I have a tracker mortgage set at .5% above base rate for the life of the mortgage.
I am happy with this as I don't have to worry about changing my mortgage every so many years.

MarkyMarkD

Base rate flat is a good deal. Most staff loans wouldn't have fees or penalties, making it even more attractive. It's probably as cheap as constantly remortgaging, given the costs involved in doing that, and a lot less hassle.

Inland Revenue will only levy a tax charge if you are perceived as receiving a taxable benefit, which is calculating by assessing the rate paid (4.75%) against their official rate. This rate is currently 5.0% and it's shown here.

So based on a payable rate of 4.75%, the tax at 40% (say) on 0.25% would work out at an extra 0.10% = 4.85% effectively payable. Not bad.

zag2me

Rikki wrote:

I have a tracker mortgage set at .5% above base rate for the life of the mortgage.
I am happy with this as I don't have to worry about changing my mortgage every so many years.

Which mortgae is this? I have just started a tracker that is 1% above the base rate and I thought that was pretty good. I know abbey do a .75% above the base rate but it had a very large arrangment fee.

Rikki

The mortgage is with the woolwich. I have always had my mortgage with them, I just wanted to change the type but it took some tough negotiating with the banks mortgage adviser. (had it for 18 months now)

Don't know if they still do it.