O is for...
Offset and current account mortgages (CAMs)
Offset mortgages didn't exist in the UK until 1994, when they were introduced from Australia.
In an offset mortgage, your savings pot is 'offset' against your mortgage debt, so you pay interest only on the difference. So, with a £100,000 home loan and £25,000 of savings you would pay interest only on your net debt of £75,000.
So instead of paying tax on your savings interest, you 'earn' tax-free interest on your offset savings at your (higher) mortgage interest rate. With a current account mortgage, your current account's credit balance is also used to reduce your mortgage debt, further lowering your interest bill.
R is for...
Remortgage
Remortgaging is replacing your current mortgage with another. You don't have to remortgage for exactly the same amount. A number of people opt for a larger mortgage in order to 'unlock' the capital in their home.
Also, you don't have to remortgage with the same lender, so it makes sense to look around for the best available deal. Addeva’s impartial mortgage service does this for you by searching the whole market.
Removals
If you don't want to hire a van and move yourself, then expect to pay a removals firm upwards of £600 to do this for you.
For more advice, visit trade association the British Association of Removers.
Repossession
Do you remember the mortgage warning, "Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it"? Repossession is the term used by mortgage lenders when they seize properties because borrowers are unable to keep up repayments.
S is for...
Second mortgages and secured loans
Taking out a second mortgage or secured loan against your property can enable you to pay for home improvements.
These loans enable you to borrow cheaply (and over long periods), but they do have their drawbacks; not least the risk that you could lose the roof over your head.
StampDuty LandTax (SDLT)
This is a tax paid by property buyers, not sellers. Although SDLT is a fixed percentage of the purchase price, the rates of tax are banded. Hence, higher-value properties attract a higher rate of tax on the entire purchase price, not just the amount in excess over previous bands, as follows:
| Purchase price |
SDLT rate (%) |
| Up to £125,000 |
0 |
| Over £125,000 to £250,000 |
1 |
| Over £250,000 to £500,00 |
3 |
| Over £500,000 |
4 |
Nowadays, as most homes in the UK sell for far more than £125,000, and as a result HM Treasury makes billions of pounds a year in SDLT revenue.