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Mortgages

Volume 974: debated on Sunday 11 November 1979

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asked the Chancellor of the Exchequer what would be the present rate of tax relief per £1,000 given to mortgage borrowers at a mortgage interest rate of 15 per cent.; and how much extra will borrowers have to pay each month on a mortgage of £10,000, £12,500, £15,000, £17,500 and £20,000 if the mortgage interest rate rises to 15 per cent.

For basic rate taxpayers mortgage interest relief on a new mortgage is worth £45 per £1,000 mortgage at an interest rate of 15 per cent.The cost to the borrower of the increase in mortgage rate from 11¾ per cent. to 15 per cent. at different levels of mortgage is as follows:

MortgageAdditional monthly costAdditional monthly cost after tax relief at basic rate
£££
10,00023·3015·20
12,50029·1019·00
15,00035·0022·80
17,50040·8026·60
20,00046·6030·40
The figures are based on a new 20-year mortgage.
Lowest denomination coinExchange rate equivalents (September 1979)* United Kingdom ½p=100
Austria1 groschen7
Belgium25 centimes79
Canada1 cent78
Denmark5 ore87
France5 centimes108
Germany (Federal Republic)1 pfennig51
Italy1 lire11
Japan1 yen41
Netherlands1 cent46
Norway1 ore18
Portugal5 centavos9
Sweden1 ore22
Switzerland5 centimes283
United States of America1 cent91
United KingdomHalfpenny100
* Based on Average of daily telegraphic transfer rates in London September 1979.
The following table is based on estimated purchasing power parities:
CountryLowest denomination coinInterest purchasing power United Kingdom ½p=100
Belgium25 centime65
Denmark5 ore60
France5 centime95
Germany (Federal Republic)1 pfennig40
Italy1 lire15
Japan1 yen40
Luxembourg25 centimes70
Netherlands1 cent40
United States of America1 cent105
United KingdomHalfpenny100