We had an interesting case today where a customer approaches us looking for solutions to reduce his outgoings to afford the investment in sending their child to private secondary school.

These days, most people feel more comfortable with a repayment mortgage because you know that your mortgage would be paid off at a future point in time; which makes perfect sense.

However, many of our customers have different goals. This customer wanted to pay for private schooling and is willing to sacrifice what is potentially working into his retirement to afford this luxury.

He was lucky enough to have an existing mortgage which is 60% loan to value of the property and was a higher rate taxpayer. Being in his early 40s, he knew that there would be a seven-year period of paying for schooling before he could convert back to a repayment basis and, at that time, increase payments to ensure he repaid off his mortgage before retirement. Upon questioning, he was fortunate to have the back-up of a sizeable private pension he can take 25% tax-free when he is 55 years old.

Many mortgage lenders don’t like offering interest-only solutions but, when a broker puts a great case forward as to why it makes sense, then several lenders will entertain this option.

Thankfully, with this significant drop in outgoings, our customer can give their child a fantastic education.

You see, the great thing about using an independent mortgage broker is that they do know their business!

Being fee-free you get the very best independent mortgage advice without paying massive fees for the privilege!