Mortgages and life assurance - more

There are several ways of involving life assurance with tax relief in your mortgage.

They are:

1 Ordinary repayment of the loan over a period through a building society or local council, with a mortgage protection policy over the period of the loan.

The protection policy may lapse with the mortgage, or there may be a small cash payment. Such a policy will pay off any outstanding loan at death.

2 Low cost endowment assurance where the loan remains at the same level through the period of the policy and is paid off in a single payment at the end of the mortgage term by the insurance company.

During the period of the mortgage, the borrower simply pays interest on the loan to the building society and premiums on the life policy to the insurance company.

3 Full endowment assurance with profits, an increasingly popular method of house purchase which, if required, can be a unit- linked plan.

This is the same principle as above, but it is more costly during the period of the policy, with consequently higher tax relief.

It also, like the with profits endowment policies we looked at in , not only pays off the loan at the end of the period, but provides a cash free bonus as well to the assured person. In these, as in the option above, there is tax relief at 30 %for standard rate tax payers and even more for those paying tax at the higher rates, and 15 %relief on the premium at the present time.


Mortgages and more

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

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read on: Mortgages and life assurances

There are several ways of involving life assurance with tax relief in your mortgage.

They are:

1 Ordinary repayment of the loan over a period through a building society or local council, with a mortgage protection policy over the period of the loan.

The protection policy may lapse with the mortgage, or there may be a small cash payment. Such a policy will pay off any outstanding loan at death.

2 Low cost endowment assurance where the loan remains at the same level through the period of the policy and is paid off in a single payment at the end of the mortgage... see: Mortgages and life assurances