Pension Mortgage
How does it work?
You make two payments per month. One to the lender to repay the interest on your borrowings and another into a personal pension plan. The aim is to build up your pension fund sufficiently to repay the loan and to provide you with a retirement income.
Advantages
Has tax advantages, as the contributions you make to the pension plan attract tax relief at the highest rate of tax you pay.
Disadvantages
You must ensure your pension is well funded to ensure you have sufficient to repay your loan and provide for your retirement. The tax free lump sum which is paid on retirement is used to repay the mortgage loan, but there is no guarantee that there will be sufficient funds to do so.
Pensions are not available thought Key Solutions and we are not able to give advice on this type of product.
