Mortgage Cost

Joolsithink

I'm thinking of lending my daughter some money towards her mortgage in the hopes this will benefit both of us, i.e. cheaper repayment for her and better investment return for me. Does anyone know how much the monthly mortgage repayments would be on £50,000 over 25 years. Many thanks.

meanmachine_2

Google is your friend.

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml


Not sure that lending your daughter money is an "investment" though, unless she pays you back each month.

What a strange way of describing it.

MarkyMarkD

Not that strange meanmachine - OP did state it was a loan and hence repayments, presumably with interest.

Jools, you should be aware that you would have to declare the interest earned on this loan for tax. Given that you can get 5.4% on savings (ICICI) and she could borrow at around 4.2%, I can't see why it's worthwhile for either of you unless you were intending to defraud the Inland Revenue.

If the point was that she couldn't get a loan for enough money, it might start to make sense ... but she should declare that she's borrowing the £50k from you and that would reduce her ability to pay the mortgage. So that wouldn't work either unless she defrauded the lender.

All the scenarios I can think of boil down to it not being worthwhile if it's all done in an honest way.

Am I missing something?

Joolsithink

Thanks for your time in pointing out that it wouldn't be an investment. Having been fortunate enough to have never had a mortgage, I thought the interest rates were much higher than they are.

Luckily I haven't mentioned the idea of a loan to her, so she will not have to be disappointed.