Remortgage to pay school fees upfront

[daffodilbrain]

Has anyone ever done this? Ds is about to go in yr 9 dd yr5. School is sending us a quote to pay all fees until end of sixth form upfront. The idea is to add this onto or mortgage. I'd really appreciate your thoughts f this was possible and the pros and cons for you.thx

What's the discount you get vs worst case scenario of mortgage rate increasing?
What's the likelihood of the school going out of business before 6th form?
What are the chances your DS is going to decide he doesn't like the school and you need to move him/they don't offer the exam choices he wants/needs?
I wouldn't.

How long till mortgage is repaid?

You are using debt, admittedly at quite a low cost, to pay and are possibly doing that over a long period of time. Use a mortgage calculator to see how a loan of the amount spread over say 15 years will actually cost. Then change the timescale so you can see the cost if you paid it off much quicker.

Are you likely to get a saving by paying upfront? What if the school goes bust, will the money be ring-fenced so you get it back? What if you moved home and could no longer use the school places? Consider things like this and see if you feel the risk is worth taking.

Utter madness for all of the reasons listed by the pp

Personally I wouldn't risk it. What is the school's motive for wanting big lump sums upfront is the first question I'd be asking?

What would happen if you needed to move school/area. Or the school was no longer meeting you DCs needs. It could happen. It seems like the school just want to tie people in.

I would be questioning why they want you to do this. I also wouldn't do it.

I paid for 2 years of 6th form upfront and got a good discount. I don't think its worth risking as much as you would pay for 5 years and 8 years. Did you ask the school to send details or are you exploring the possibility off your own bat?

I'd be incredibly suspicious of the sustainability of the school's long term financial forecasting if they're asking for upfront fees for such a long duration...before even considering a remortgage I'd be asking:

1. Why the change in policy?
2. What happens to your money if the school goes into administration/folds/is bought by another business?
3. What happens to your money if events mean moving your child is necessary?
4. What if 6th form at that school does not meet the ongoing educational aspirations of your children?

This sounds like a desperate measure from a school on the precipice of calling in the administrators. Definitely be diligent in checking out the behind the scenes before handing over any further money.

Most schools refuse to take payment this far in advance. I would be a bit suspicious.

No way! What if they fold? You'd be utterly screwed.

No way. Maybe for y9 to y11, and possibly a couple more years once the younger is settled, but they may want to go elsewhere for sixth form, the school may not be right for them, what if they get expelled...

Did the school suggest the s?

Or is it a scheme running in a well-established school? One avenue which you have decided to explore

You need to check what refund you get shouid your DC leave the school (your choice, ill health, expulsion) and exactly what discount you get.

And do think hard about whether paying all through is a good idea, or if paying in advance in chunks (matching natural break points at some or all of 11+, 13+ and 6th form) might be more prudent

No. No. No. No. No!
For all the above reasons.

One of the private schools in Edinburgh closed down once with absolutely no notice given to the parents (letter at the end of term saying we’re shutting, you’ll need to find a new school for after the holidays). Imagine if you’d paid for a decades worth of those school fees...

Plus weighing up the savings against the interest payments for the term of the mortgage might make it less attractive.

I understand that you need to use the equity in your house to pay the fees (whether that is a good idea is a different issue) but do not pay it all across to the school.

If you get a lump of £000s split is a cross different accounts and ISA and keep it in your control.
Do not pay it to the school.

No schools not suggesting I read it in the Sunday times and also a friend suggested it. The school
Is very unlikely to fold its rich with lots of land and buildings. there is a small (tiny) discount if you pay up front plus no incremental rises each year. I've asked for a quote. It would mean doubling our mortgage but even then the incremental increase would be far less to pay out each month so we could reinvest.i welcome all the comments.

ExH paid DC school fees up front - he negotiated a very good discount on fees (much more than they initially offered) and was protected from future fee increases. DD decided to go elsewhere for 6th form and the school refunded the difference.

School was full with lots of property assets so he didn’t have any concerns that they would fold. The school were doing major works (new STEM centre), so I presume they were glad of a lump sum. However, It is a very tough market for private schools at present so I would look carefully at the school and how (if) your money is protected

I would be vary, vary wary about doing this. Might be worth downloading the school’s accounts from companies house to look at their financial position.

Most private schools in my area have closed, often at very short notice, why would you pay in advance?

The idea to pay in advance is 1) reduce the overall payment 2) The increase in mortgage payments would be much less than what the monthly schools fees would be so there would potentially be a substantial monthly saving (to offset/reinvest)
Big downside is the mortgage payments would go on about 7 years (at the higher rate)once the kids have finished school

I will be doing this. The school is part of a v well established group of schools which own huge amounts of property I have no concerns over the longevity of the school and it makes sense for me in my circumstances. I am not remortgaging because I have the cash but I am doing it to protect myself against fee increases. And when I do it my son will be going in to Y3. If you are confident in the school and can afford the repayments and insure yourself against sickness/death etc (so you will be able to continue to meet the payments) then why not.

I would be very wary of doing this. A couple of private schools near us have folded recently. One was a huge surprise.

You never actually know their true financial position, as they may "own lots of buildings" but they may also have huge amounts of debt. Too risky in my view.

I would do this. In fact, I am in the process of doing it!