would you re mortgage to take out equity in this situation?

[historybluw]

I should say that I have always been very against taking money from your home. I know it doesn’t make financial sense. However, I really want our one dc to go to private school. It’s going to cost around 100k for primary school. I’d like this money already available so we can spend the next 10 years saving for secondary. The only way we can raise the majority of this is via borrowing from our home. We will then have enough income, or should do, to save for secondary without much issue.

The thing that we have as ‘back up’ is that we should inherit enough to pay off the mortgage eventually anyway, especially as withdrawing this 100k would still leave around 150k equity in the house too. I know you cannot rely on inheritance but in these circumstances I feel inclined to take the chance. DP is happy to go with my decision on this (the home is in my name and legally protected). Would this be utterly mental? Ive been fixated on private education for a long time and prepared to do whatever really to ensure dc can attend, and I don’t know if I’ve lost sight of reality in the process.

That sounds far too risky. If you are thinking of equity release you need to be over 55 and they are generally not advised for most people. Speak to an IFA but could you downsize and use the equity towards private education? My son went to state school and did very well academically.

Utter utter waste of money private primary. I can assure you, you will get a much higher standard of education in state at that age.

Go if you must to secondary.

Should you send your kid to private school even though you can't afford it and risk your family's financial security?

No.

Why are you fixated on private primary?

Thanks for the feedback!

Definitely a good point regarding re mortgaging later instead of now.

Those asking why private… just prefer it! The environment, the smaller classes (usually) the extra curricular activities, the closer attention to detail on DC’s well-being etc. This is for a day place, not boarding.

Hahaha this advice is so dumb I don’t even m one where to start. It’s all based on borrow borrow borrow. If you have to borrow then you CANNOT afford private school.

This sounds like an awful idea.

If you can't afford fees (including inevitable above inflation rises each year) comfortably from your income, you can't afford private school, like 93% of the british population.

Also it really is not the be all and end all. In most of the schools with the highest grades etc, the children have a) been selected to already have high academic potential and b) are often heavily tutored throughout.

The value add is low. They can add confidence/polish and exposure to better quality extra curricular activities, for those children not getting this at home.

Can you pay monthly fees currently without remortgaging? If the answer is no, then you can't afford private school. Borrowing at a high interest, to save at a lower interest, is absolute lunacy. As others have said, don't rely on inheritance either.

Well your DP would be happy if the house is is in your name only and your not married he’s not going to lose anything financially are they

interest rates are going up or at the very least staying around this level for a while

If the rates were low like 1 percent or half a percent then yes it would make sense - sort of
but if you can only do it by remortgaging then you can’t really afford it

Couldn't you just send them for secondary, if you think it's really important for them to go? I just don't think remortgaging your house is worth it.

Or alternatively, start saving while they're at infants, see about moving them in for juniors (which you could pay out of income), you could then still be saving a bit for secondary on top (because if you can afford a higher mortgage and to save up for secondary school fees you can save the difference that the higher mortgage would be (about 600? a month)), then use savings + pay some out of income for secondary?

I get that you want them to go for both, but secondary only would be a sensible compromise given you can't afford it without borrowing money.

@Yellowlegobrick if we used our income we would have around 100 left a month to save which means nothing for secondary.

This is even worse. You have no flex in the budget. What about uniform, school tris and all the extras? What about the year on year above inflation fee increases? What about the massive leap in fees between primary and secondary? Have you factored any of this in?

This is fair enough but if this is the case why have you waited until your child is 3 to start thinking about it.

Will remortgaging your home be enough money to see him through to 16?

What about college and university are you planning on helping him with his fees?

What happens if you and DH separate or one of you stops working, will it be enough money to still be able to live and see him through until he finishes?

What about inheritance?
If the house has not been paid off then will he have anything when you both die.

A lump sum of money from inheritance is more important than a private education when there are doctors who can’t get a mortgage because they don’t have a deposit.

I think you’re taking a lot of risks not only on your sons future but yours and DHs future too.

Kindly, you genuinely cannot afford this. You can’t. You would be putting all of you at risk of financial insecurity, sorry I do just think it’s crazy. Your child is 3, you haven’t given them the opportunity to succeed at state school and many do.

You need to be realistic if you can afford private education without massive sacrifices to lifestyle. Its not just the fees

Depends on your primary, if we were in catchment for a decent primary school we would have sent our sons to it. As it happened, we weren't so they went private all the way through. This was a while ago- both late 20s now, so we could afford it from income. (just) . You need to think about the add ons as well. At the schools my boys went to , there were lots of parents like us who were not replacing their car every year or having 2 or 3 foreign holidays a year, because they were concentrating on paying the fees, however, some were very wealthy and you got the odd child who could be very unkind. IME this was handled very well by the school but I have heard differently from parents whose kids went elsewhere.
I am not sure I would have wanted to do release equity to pay for private schools especially primary. Also fees have increased greatly and if private schools loose their chartitable status ( if they have it) you would be looking at a great increase in fees. Can you fund it?

You're not "taking equity" - you're borrowing money. Any house price increase doesn't exist until you sell the house and even then the house you buy would have gone up in value too. Forget the potential house price profit that you've not yet made. Think of it is taking out a loan, presumably at a high interest rate.

Do it by downsizing not equity release. Look at what Martin Lewis says about the whole concept.

in the broader picture, If you do equity release it means you have nothing to fall back on of anything awful happens or if circumstances change. Friend with elderly mother who took out more than 1/2 value of house, so she’s now renting an assisted living apartment when she ought to have been able to buy one

Would the bank even let you do this? Usually equity release of that amount if for home improvements or something tangible.
What happens if house prices crash and you find you need to move?
Honestly in your situation you need to move to an area with a decent state primary & secondary. This is pie in the sky stuff

You mentioned an inheritance that could help your financial situation. Have you spoken to the person you will inherit from about your wish for your ds to be privately educated?
Under some specific circumstances, paying school fees directly would be excluded from inheritance tax and can be a popular way for Grandparents to help out.

@historybluw have you factored in annual price rises? And the increase in your mortgage costs given interest rates and the increased borrowing?

why not state for now then transfer once you’ve saved?

it really sounds like you can’t really afford it, I certainly wouldn’t be risking our home/security if there was another way

some people view private education as an investment into their children's future, which does make sense. but investments come with risks, so need to be done very carefully. I agree with a lot of people here, when can't afford to do it easily, sacrifice the primary years, supplement it yourselves, put in time and effort to discover your children's talent, in another way, to assess if they do need private education. this may sound cold, but some children might be better off staying in the state system, as the pressure of parents remortgaging home to pay for their education can be too immense if they don't have the necessary talent to match it.

@cruisingabout i certainly wouldn’t be telling dc we had done that!