Bursary applications

[Nonnus]

I am filling in the application form for the school I would like DS to go to next year. I am confused by the "Outgoings" part of the form. It asks for details of "Mortgage interest (state interest only and not instalments of mortgage paid)." But for rent (if you rent instead of own), it asks simply for "Annual Rent Payable on Home".

I don't quite get this, but I'm a bit thick with maths so perhaps someone can explain. On the assumption that the mortgage payment relates to an "average" house in the relevant area, it seems to me that your mortgage instalment (capital plus interest repayment) is as much an "outgoing" as a rental payment. In our case, our house is at the low end in terms of property value.

It seems to me that if only the interest on my mortgage (let's say £300 p.c.m) is assessed as an "outgoing" then I would be in a much better position vis the bursary application if I were renting for say £1,000 p.c.m. But that can't be right can it? The guidance notes do say that no award can be made if equity in house plus savings equal a sum greater than the cost of an average house in the area, but that doesn't remotely apply to us.

Can anyone more practised at the bursary thing enlighten me as to how this works?

[trinity0097]

Perhaps they expect you to switch to interest only if a mortgage to free up additional funds each month.

[Nonnus]

Possibly. Or do they expect you to sell your house and use the equity?

Would be surprised though because I know of a couple of families in the area so have bursaries (no idea to what level) and they are home owners. Anyone?

[joanbyers]

School makes the rules, you have to live with them.

But I think they have a point, someone who rents has nothing at the end of the year, whereas on a repayment mortgage you have paid down say £2k, so you are £2k better off.

At the beginning of a 25-year mortgage you will pay mostly interest, but as it goes on, it goes towards majority repayment. So you will have a greater allowable expense now, than in 6 years time.