Monthly Archives: July 2023

Could remortgaging help you beat the cost of living crisis?

Millions of families are seeking strategies to navigate the current economic turbulence

The headlines are filled with reports of the escalating cost of living crisis. The surge in inflation, climbing interest rates and skyrocketing energy prices create a financial strain that even the most budget-conscious households can’t ignore.

Many families will seek strategies to navigate this economic turbulence and regain control of their finances. Amidst all the uncertainty, there’s a beacon of hope – remortgaging.

Taking out a mortgage in later life to bypass Inheritance Tax

Over-60s consider passing on assets or property to family members

As the population of over-60s in the UK increases, more and more are considering taking out mortgages to bypass Inheritance Tax (IHT). This strategy could reduce a potential IHT liability when passing on assets or property to family members after death if appropriate.

IHT is a levy on the total value of an individual’s estate after they pass away, inclusive of all assets – property, possessions and cash. The typical IHT rate currently stands at 40%, applicable only to the portion of the estate exceeding the tax-free nil-rate band threshold of £325,000.

Spike in mortgage costs

First-time buyers spend almost £200 more monthly on their mortgage payments

Following the mini-budget announcement by the Liz Truss government in September 2022, the housing market experienced a period of turbulence. This resulted in a spike in mortgage costs, with the average first-time home buyer paying a hefty £1,218 monthly on their mortgage last October.

The budget, prepared by former Chancellor Kwasi Kwarteng, included several unfunded tax cuts and spending commitments. It led to uncertainty and prompted many lenders to withdraw their mortgage products from the market. This action and predictions of rising interest rates contributed to the increase in mortgage costs.