RBS Staff Mortgages Northern Ireland

youralanger

Hi folks
First of all, apologies if this has been covered, i have tried to read up as much as humanely possible on other mortgage queries to see if my problem has been covered...

Coming from Northern Ireland, the last couple of years has seen a huge increase in house prices - scaring the bejesus out of would be 1st time buyers like myself....however theres recently been a slowdown and Im hoping to make my move and get on the "ladder."

My problem is this - my girlfriend and I have been recently saving for our deposit - and in a months time she will qualify for an application for a staff mortgage with Ulster Bank (RBS)...Within her contract it claims that we can obtain a mortgage of upto 120,000 at a rate of 3%...obviously this sounds fantastic -my only concern is the extra tax we would be liable to pay & also needing a mortgage of closer to 140k - Im not sure if the next 20k would be charged at a much larger rate?...

Does anyone have any knowledge of staff bank mortgages & whether theyre worth plumping for? Any advice is much appreciated!!

Tiddler_2

It's a while since I looked at staff rate mortgages, and can't give an official answer on the additional £20k, I would guess it is taken at a public rate so would be around 6% at the present time. If you can get a rate of 3% I would snap it up. You will be taxed on the benefit in kind, which is worked out on HMRC official rate currently 6.25%, but I would anticipate it being better than the public rates out there at the moment

youralanger

Many thanks - yeah the 3% sounds fantastic, but ill need to go away and do the calculations...any ideas where i start?

Tiddler_2

As I said it's been a while but I think it is based on the difference in interest payments charged at your highest tax rate.

I'm sure your personnel dept should be able to advise you.

Here's an example of costs:

120000 x 6.25% = £7500 p.a

120000 x 3.00% = £3600 p.a.

difference = £3900 p.a x 20% = £780 p.a. or £65pm tax to pay.

compare it with a rate at 5.5% (assuming it to be lowest currently available)

120000 x 5.50% = £6600 p.a.

so £6600 - (£3600 + £780) = £2220 pa saving.

Obviously if you are a higher rate tax payer then the saving would be less.