ContractorMoney 'FLEXIMORTGAGE' OFFER: Tax efficient Offset mortgages for contractors

[d000hg]

IT Contractor Mortgages Information and Quotation :: Contractor UK

I see about a million threads on mortgages (perhaps a good topic for a sticky collating wisdom) but wondered if anyone has this particular product... and if CM really are able to give better deals than regular providers?

This is simply a regular offset mortgage, right? i.e. combine savings and mortgage so they cancel each other out as you save?

I saw a couple of threads recently asking if you can actually use the company as some sort of collateral... I assume the short answer is 'no' and I don't need to go find those threads?

[mudskipper]

IT Contractor Mortgages Information and Quotation :: Contractor UK

I see about a million threads on mortgages (perhaps a good topic for a sticky collating wisdom) but wondered if anyone has this particular product... and if CM really are able to give better deals than regular providers?

This is simply a regular offset mortgage, right? i.e. combine savings and mortgage so they cancel each other out as you save?

I saw a couple of threads recently asking if you can actually use the company as some sort of collateral... I assume the short answer is 'no' and I don't need to go find those threads?

The short (and long) answers were 'no'. But it would be interesting to understand how this mortgage is 'tax efficient'?

[Jessica@WhiteFieldTax]

Tax efficiency comes as you normally pay tax on your savings, and don't get tax releif in loan interest - by offsetting you avoid the tax on the savings.

[barrydidit]

The short (and long) answers were 'no'. But it would be interesting to understand how this mortgage is 'tax efficient'?

I suspect it's just like any other offset product. The tax efficiency element comes from not having to pay tax on your savings interest - cos you won't have any.

[Olly]

hang on...contractor money don't charge customers a penny, their commission comes from the lender only or so they told me.
It's as tax "efficient" as any other offset mortgage of course - absolutely ZERO use of Ltd money asked for or implied.
Contractor money are useful if you've just started out but with a few years accounts there's little or no benefit and more likely a downside.

With 3 years of accounts (or maybe it was even 2, I've forgotten) you'd be hard pressed to beat FirstDirect if you're intending on making a substantial offset. Either with a directors loan, some sort of deposit on trust or neither and just keeping it "under the radar", their no fee deal seems hard to beat at the moment.

[northernladuk]

The devil will be in the details. I applied for an offset mortgage last week and they said they can also offset LLP and sole trader business accounts as well as savings accounts but not LTD's. What they do is stop paying you interest on the accounts that you link to the offset though. The tax saving as mentioned was that you offset against the 4% mortgage where you would normally pay tax on the 2% in your savings.

The bloke at RBS advised they cannot accept offsets against LTD's because of HMRC rules, it's not their choice.

[FarmerPalmer]

You can offset personal savings and current account balance, thereby effectively getting the a rate of interest equivalent to the mortgage rate, but tax free.


A limited company is a separate single entity to you as a person, so the assets of that limited company can not be offset against your personal debts.


Contractor Money arranged my mortgage for me with a well known High Street bank.

I had already applied to that High Street bank, but they wouldn't touch me because I didn't have 3 years accounts at the time.

I got a deal at 0.1% higher interest rate than advertised on the High Street, but I'm happy because I couldn't get a base rate + 1.09% tracker today

[Moscow Mule]

I don't know about you lot, but I've always got £10-20k sat in an account for the tax man, along with anything up to £40k dividend payments (I tend to take a couple a year and pay it out to a current account).

It seems like a no brainer to get an offset if you're anything like me...

[d000hg]

I don't know about you lot, but I've always got £10-20k sat in an account for the tax man, along with anything up to £40k dividend payments (I tend to take a couple a year and pay it out to a current account).

It seems like a no brainer to get an offset if you're anything like me...

Maybe I'm missing something but if you have large personal savings already, why do you need an offset rather than just putting up a big deposit?

And if you have spare income each year, why not get a regular mortgage which allows additional repayments?

[northernladuk]

Maybe I'm missing something but if you have large personal savings already, why do you need an offset rather than just putting up a big deposit?

And if you have spare income each year, why not get a regular mortgage which allows additional repayments?

Because the money is then stuck in your mortgage and there is nothing you can do to get it should you need except remortgage. I personally want the flexibilty of having the money offset against the mortgage but have it ready for when the kids go to uni in the next few years and to get a new car around the same time.

The days of the truly flexible mortgage where you could draw out of the mortgage overpayments quickly and without penalty have sadly gone.