Clients Choose Interest-only Mortgage To Save Money And Gain Greater Flexibility

After two great years of business during the pandemic with a 15% increase in profits, they were tempted to withdraw £500k from the business to pay off part of the existing £1.7m mortgage. However, in order to achieve this, they would have had to pay up to 39% dividend tax on any money that they withdrew from the company. Furthermore, they were looking to take out a capital repayment mortgage so that they could pay off the capital as quickly as possible and pay less interest overall. However, this would mean that their monthly repayments would be high and leave them restricted in their monthly cashflow with little flexibility.