Home buyers in England, Wales and Northern Ireland can save £1 a month by taking out a tax-free mortgage.
The tax break is available to anyone with an interest-only mortgage.
BBC News explains how to take out a mortgage.
How to qualify for a mortgage tax break?
To qualify for the tax break, you need to be aged between 21 and 65.
You must own property with a mortgage of more than £500,000.
You can apply online.
Mortgage interest deduction You can deduct the interest paid on a mortgage you take out.
The interest can be paid at the same rate as the loan.
For example, if you paid £500 in interest last year and a mortgage was taken out in 2021, you can deduct £250 in interest from the amount you pay each month.
For more information on interest deductions, read the Mortgage Interest Deduction Guide.
For information about the mortgage interest deduction, read How to Get Your First Mortgage Tax Free.
Interest rate relief You can reduce your mortgage interest rate by £50 a year from 6.5% to 5.5%.
The reduction will be paid when you make your mortgage repayments.
This can happen when you sell your home.
For further information, read how interest rates are calculated.
Tax-free savings If you buy a house with your own money, you’ll pay less tax than someone who makes a mortgage, but there’s a catch.
You need to make sure the money you borrow is used for the purchase.
For a more detailed look at how tax-saving can help, read Tax-Free Savings Guide.
You’ll pay a lower rate of tax if you buy the property on your own, rather than borrowing it from a lender.
The property tax deduction is available for those with a property worth more than a £100,000 and £100 for properties over £100 million.
Mortgage payment rates There are two types of mortgage interest rates: low-interest and high-interest.
A low-rate mortgage will pay interest at a rate of 5.3% on a loan of between £1 million and £3 million.
A high-rate loan will pay the same interest rate on a £5 million loan.
This means that if you earn £100 a week, you could borrow £1m to buy your first home.
Low-rate mortgages are available to those with an initial mortgage of £1.5m and a maximum mortgage amount of £5m.
High-rate loans are available for up to £5.5 million.
They have a maximum loan amount of up to the sum of the initial and maximum mortgages.
You may be able to claim the mortgage deduction for interest you paid when the property was bought.
You will have to make payments in full each year, but you can claim up to 10% of your interest on any payment.
You also won’t have to pay tax on any interest you pay if you sell the home.
You won’t pay tax if the property is sold after you have taken out the mortgage.
You could claim the tax credit for any interest paid when a property was sold.
Mortgage deduction How much interest does the mortgage pay?
A mortgage is a loan made by a person or company to someone else, typically the lender, to buy or finance the purchase of a property.
The amount of interest paid varies depending on the type of mortgage and the amount of borrowing you make.
The most common types of mortgages are for fixed-term mortgages, where the principal is held for a set period of time.
A variable-rate, variable-interest, variable mortgage lets you pay interest on a variable rate, or on a fixed interest rate.
For some types of loans, the interest rate is fixed at the time of the loan, rather the interest is paid when an asset is sold.
The maximum amount of mortgage payments a person can make is capped at £10,000 for a variable-rated mortgage and £50,000 in a variable interest rate mortgage.
A maximum of £10m for a fixed-rate variable mortgage is capped and can be up to an additional £1bn for variable interest rates.
For other types of home loans, interest rates can vary depending on when you buy them.
Some mortgages are paid at a fixed rate for life, while others are paid annually.
Interest rates for a home loan You can take out one of the following types of loan: fixed-interest mortgage You pay interest to a mortgage lender at the fixed interest interest rate of the property you buy, rather as in a conventional mortgage.
For instance, a fixed mortgage of between 5% and 10% may be available for £500.
The mortgage can be repaid on a yearly basis, but not in the same year.