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Flexible Mortgages and some examples

Covering the cost of School Fees

Example: Capital Repayment Mortgage of £ 75,000 over 25 years

Scenario: Borrower wants to plan for School Fees in a few years time.
He is happy to make Fortnightly repayments, and is able to slightly overpay his mortgage amount by £47 per month. 
He receives an annual Christmas bonus of £1,500 which he pays into his Flexible Mortgage account. He feels that he does not want to index-link his mortgage repayments each year.

Additional payment into Flexible Mortgage Account
of a Salary Bonus each year = £ 1,500

School Fees begin at year 4 and last for 4 years.
Debit payment for school fees per year = £ 6,000

Example: Capital Repayment Mortgage of £ 75,000 over 25 years

Scenario: Borrower decides to `overpay` his mortgage on a regular basis to help fund school fees.

Result: Mortgage becomes repaid at 16 years 1 month, including having made the provision funding school fees.

Borrower saves £ 40,944 in mortgage interest.

The effect of the draw-down of funds to finance the school fees can be seen on the above chart between years 4 and 8.

In summary, by paying an extra  £ 2,064 into his Flexible Mortgage account each year (under £ 40 per week) he has comfortably covered expensive school fees, but most importantly has enjoyed a large saving of mortgage interest over his mortgage term.

Please do call us on 01253 404154 for latest information.

Please remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it