Pep mortgages take centre stage: using the stock market to help repay your mortgage seems an excellent idea and the personal equity plan seems an ideal way to do it. The problems is to choose the right investment and the right plan
Article Abstract:
Pep mortages only represent 1% of repayment methods according to figures from the Council of Mortgage Lenders, although they are tax efficient and flexible. Borrowers invest a tax free sum into a unit or investment trust Pep each year, along with a further amount into a single company plan, and they purchase a Pep mortgage package or build their own package. Interest on the loan is paid, allowing the investment to grow to repay the capital advanced. It can be cashed in at any time, however it is linked to stock market performance and may not generate enough to pay off the loan.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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Make the best of the endowment backlash: the good old repayment mortgage is coming back into fashion following the public disscrace of its racier cousin, the endowment. But borrowers have plenty to gain from looking at other mortgage choices
Article Abstract:
There has been much bad publicity surrounding endowment mortgages and new borrowers are seeking alternative repayment methods. However even if a mortgage policy has been mis-sold, the borrower should retain it to avoid surrender penalties. Repayment mortgages are not as tax efficient as some investment based mortgages, such as Pep mortages which are both tax efficient and flexible, and can be cashed in at any time and used to pay all or part of the mortages. Pension mortages are also tax efficient with tax free contributions.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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What's the catch?: mortgage lenders are desparate to win new customers. But locking into one of the all too tempting rates on offer carries its own risks
Article Abstract:
There is fierce competition in the mortgage market leading to various offers by lenders including cuts in fixed and variable rates, cashback deals and inclusion of legal fees and stamp duty. However many lenders are protecting themselves with heavy surrender penalities, with some of up to five years. Cashback deals mean that borrowers can take a cash lump sum but the surrender costs can be very high. Fixed rate deals are suitable for those who need to know what they will be paying in the short term.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
User Contributions:
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