Mortgage Tax Relief

Interest on the first £60,000 of loans taken out to buy your only or main home qualifies for income tax relief. Before August 1988, each single person, or each married couple, had their own £60,000 limit - so joint buyers other than married couples could get relief on loans much greater than £60,000. But from 1 August 1988, the £60,000 limit has applied to each property regardless of the number of buyers.

TIP - If you're joint home owners who aren't married and have a mortgage of more than £60,000 taken out before August 1988, be wary of replacing your existing mortgage - you'll get tax relief on only £60,000 of a new mortgage.

Most people now get tax relief through MIRAS (Mortgage Interest Relief at Source). This means that you deduct basic rate tax from your interest before you pay it. Under this scheme, you can get this tax relief whether or not you're a taxpayer. Higher rate taxpayers can claim extra relief from their tax office.

WARNING Some lenders are not in the MIRAS scheme avoid these if you're a non-taxpayer. (Non-taxpayers can't claim mortgage interest relief through their tax office.)

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Changes To Mortgages

Another change to the mortgage market in recent years is the increase in the amount you can usually borrow. Nowadays, it's common for lenders to set a maximum of three (sometimes three- and-a-half) times your salary if you're single, and between two-and-a-quarter and three times the higher salary plus once the lower salary for a couple. And you may be able to get a loan for the full value of your home without having to provide part yourself (though the value will be decided by the surveyor and may be less than the asking price, and you'll still need to pay the fees and expenses involved in buying the... see: Changes To Mortgages

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