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    • sultanoflondon
    • By sultanoflondon 27th Nov 17, 9:31 AM
    • 27Posts
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    sultanoflondon
    How do people pay mortgages using stoozing?
    • #1
    • 27th Nov 17, 9:31 AM
    How do people pay mortgages using stoozing? 27th Nov 17 at 9:31 AM
    Hi all,

    I have read articles and threads in the past where people would claim they managed to reduce their monthly mortgage bill using stoozing. The most memorable example was the forumite 'Stooz' himself/herself, who said that they reduced their monthly mortgage bill by £300.

    I understand stoozing through purchases, balance transfer and money transfer cards but I am not entirely sure as to how someone could use any of these to contribute towards a mortgage. Could someone explain it to me please? The only way that I can think of is in the last two or so years of a mortgage, a purchases credit card is used to overpay a mortgage and then when the mortgage finishes, the extra monthly income (that would have gone into the mortgage) is used to repay the card. Or, a money transfer into the current account and from there into the mortgage but surely this would only work towards the end of a mortgage?

    Thank you!
Page 1
    • MallyGirl
    • By MallyGirl 27th Nov 17, 9:49 AM
    • 2,098 Posts
    • 6,968 Thanks
    MallyGirl
    • #2
    • 27th Nov 17, 9:49 AM
    • #2
    • 27th Nov 17, 9:49 AM
    I can't answer for anyone else but stoozing works for me as I have an offset mortgage - the OneAccount. It works just like a bank account with a massive overdraft so every penny that stays in there via use of 0% cards is a penny I am not paying interest on in my mortgage. I have also used money transfers straight into the pot. When the 0% expires I just pay it back and my overdraft/mortgage gets bigger again (if I can't BT to somewhere else at 0%).
    In the good old days, when the mortgage rates were higher, Egg (and others) would quite often offer fee free money transfers which were excellent for me.
    Now that mortgage rates are low and money transfers incur fees it is less worth it.
    I'm a Board Guide on the Debt-free Wannabe, Loans & Credit Cards boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com
    Any views are mine and not the official line of MoneySavingExpert.com.
    • fanheater
    • By fanheater 27th Nov 17, 8:27 PM
    • 73 Posts
    • 24 Thanks
    fanheater
    • #3
    • 27th Nov 17, 8:27 PM
    • #3
    • 27th Nov 17, 8:27 PM
    Attractive as the offset mortgages are as products, I have found that in practice you can use most mortgages as offsets or indeed savings accounts, in the sense that you can still get your overpayments back, just not quite with the same flexibility as an actual offset. Halifax was very flexible in letting me manage my own payments while Clydesdale is not too bad since I can ask back everything I've overpaid. They call it a redraw or something.

    The overpayment limit is usually 10% of your mortgage balance per year but this is still a big chunk until your mortgage is small enough to drown in the bathtub, and bigger than the amount you can realistically stooze.

    Through this method I slow stooze my mortgage as much as I can. Because my mortgage interest rate is 3%, it is pretty much as good as I could get putting the cash anywhere else.
    • flower77g
    • By flower77g 27th Nov 17, 10:14 PM
    • 37 Posts
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    flower77g
    • #4
    • 27th Nov 17, 10:14 PM
    • #4
    • 27th Nov 17, 10:14 PM
    OK, so I did this using a money transfer card to my current account; transfer money from current account to mortagage account. Offset mortgage not required.

    Useful if your annual mortgage rate is higher than the one off money transfer fee. It isn't easy to "redraw" the money with all mortgage lenders though.
    • sultanoflondon
    • By sultanoflondon 28th Nov 17, 3:49 PM
    • 27 Posts
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    sultanoflondon
    • #5
    • 28th Nov 17, 3:49 PM
    • #5
    • 28th Nov 17, 3:49 PM
    Attractive as the offset mortgages are as products, I have found that in practice you can use most mortgages as offsets or indeed savings accounts, in the sense that you can still get your overpayments back, just not quite with the same flexibility as an actual offset. Halifax was very flexible in letting me manage my own payments while Clydesdale is not too bad since I can ask back everything I've overpaid. They call it a redraw or something.

    The overpayment limit is usually 10% of your mortgage balance per year but this is still a big chunk until your mortgage is small enough to drown in the bathtub, and bigger than the amount you can realistically stooze.

    Through this method I slow stooze my mortgage as much as I can. Because my mortgage interest rate is 3%, it is pretty much as good as I could get putting the cash anywhere else.
    Originally posted by fanheater
    What exactly do you mean by "slow stooze"? So what you would do is take as much out of a money transfer card and then use it to overpay your mortgage. Then at the end of the money transfer card's 0% period, you can balance transfer as much as possible to a balance transfer card. But what about the rest?

    OK, so I did this using a money transfer card to my current account; transfer money from current account to mortagage account. Offset mortgage not required.

    Useful if your annual mortgage rate is higher than the one off money transfer fee. It isn't easy to "redraw" the money with all mortgage lenders though.
    Originally posted by flower77g
    Great thank you for your reply! How would you repay your money transfer card though?




    Also, a general question for anyone, say I have a 12 months 0% purchases card with a credit limit of £5,000 per month (which I max out and pay the minimum payment per month of £100). This means that I end the month with an outstanding balance of £5,000-£100 = £4,900 added to the last month's balance, all of which is at 0% of course. Say I do this for 11 months and leave 1 month to switch cards. This means that I have an outstanding balance of 11*£4,900 = £53,900. How can I move most of this £53,900 balance to balance transfer card(s)? For example, I open a balance transfer card which gives me 24 months 0% with a credit limit of £8,000. I have heard that you can balance transfer a maximum of 95% of your credit limit to a balance transfer card. So, at the start of the 12th month, I balance transfer 0.95*£8,000 = £7,600 to this card from the purchases card (assume no balance transfer fee). What could I do with the remaining £53,900 - £7,600 = £46,300? Should I just open more balance transfer credit cards? Or could I open the balance transfer credit card 6 months into the purchases card and start transferring the balance every month after the 5th month? If I were to do this, I would be use the purchases card card for 5 months and then open a balance transfer credit card and start transferring maximum balance every month? This would mean that I would end 12 months of the purchases card with a balance of 11*£4,900-7*£7,600 = £700. Is this possible? Is this the way to minimise my payment at the end of the 12 months of the purchase card? Or is the best way to open multiple balance transfer cards at the end of 11 months and just transfer the maximum balance then and only transfer a balance once?

    Advice on this would be very appreciated!
    • MallyGirl
    • By MallyGirl 28th Nov 17, 9:02 PM
    • 2,098 Posts
    • 6,968 Thanks
    MallyGirl
    • #6
    • 28th Nov 17, 9:02 PM
    • #6
    • 28th Nov 17, 9:02 PM

    Also, a general question for anyone, say I have a 12 months 0% purchases card with a credit limit of £5,000 per month (which I max out and pay the minimum payment per month of £100). This means that I end the month with an outstanding balance of £5,000-£100 = £4,900 added to the last month's balance, all of which is at 0% of course. Say I do this for 11 months and leave 1 month to switch cards. This means that I have an outstanding balance of 11*£4,900 = £53,900.
    Originally posted by sultanoflondon
    I think you have mistaken how credit cards work. If you are given a £5k limit then that is a total limit not a monthly one. Unless you earn over £100k per year you are not going to get a £50k credit limit.
    I'm a Board Guide on the Debt-free Wannabe, Loans & Credit Cards boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com
    Any views are mine and not the official line of MoneySavingExpert.com.
    • ricky_v
    • By ricky_v 28th Nov 17, 9:26 PM
    • 264 Posts
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    ricky_v
    • #7
    • 28th Nov 17, 9:26 PM
    • #7
    • 28th Nov 17, 9:26 PM
    What exactly do you mean by "slow stooze"?
    Slow Stooze - Using a 0% purchases card to use on purchases, therefore slowly building the 0% debt up
    Fast Stooze - Using a 0% money transfer card or a no fee money transfer card (with subsequent transfer to a 0% balance transfer card, the no fee MT card is known as a "mule card") to instantly build up a debt at 0%.

    Any mortgage can be offset, my mortgage is one of those where any overpayments made to it cannot be taken out again, so instead the stooze pot is in high interest accounts (equal or higher than the mortgage rate) so the interest from those accounts partially covers the interest charge on the mortgage debt. The only difference is the mortgage repayments doesn't reduce with the stooze pot, so it's not as obvious and the interest is taxable apart from the first £1000/yr, whereas an interest reduction in an offset mortgage isn't.
    • sultanoflondon
    • By sultanoflondon 29th Nov 17, 11:45 PM
    • 27 Posts
    • 0 Thanks
    sultanoflondon
    • #8
    • 29th Nov 17, 11:45 PM
    • #8
    • 29th Nov 17, 11:45 PM
    I think you have mistaken how credit cards work. If you are given a £5k limit then that is a total limit not a monthly one. Unless you earn over £100k per year you are not going to get a £50k credit limit.
    Originally posted by MallyGirl
    Is £1,000 per month more realistic?

    Slow Stooze - Using a 0% purchases card to use on purchases, therefore slowly building the 0% debt up
    Fast Stooze - Using a 0% money transfer card or a no fee money transfer card (with subsequent transfer to a 0% balance transfer card, the no fee MT card is known as a "mule card") to instantly build up a debt at 0%.

    Any mortgage can be offset, my mortgage is one of those where any overpayments made to it cannot be taken out again, so instead the stooze pot is in high interest accounts (equal or higher than the mortgage rate) so the interest from those accounts partially covers the interest charge on the mortgage debt. The only difference is the mortgage repayments doesn't reduce with the stooze pot, so it's not as obvious and the interest is taxable apart from the first £1000/yr, whereas an interest reduction in an offset mortgage isn't.
    Originally posted by ricky_v
    Got it! Do you slow stooze and fast stooze at the same time? Also, when you money transfer (using a no fee card) and then balance transfer, how quickly does the balance transfer occur? Is it in the same working day? Obviously, you should minimise the time that the money transfer card has a balance on it to maximise your profit. Lastly, do you then close down that no fee money transfer credit card? Or do you continue to withdraw your monthly credit limit and immediately balance transfer to the balance transfer card?
    • MallyGirl
    • By MallyGirl 30th Nov 17, 9:58 AM
    • 2,098 Posts
    • 6,968 Thanks
    MallyGirl
    • #9
    • 30th Nov 17, 9:58 AM
    • #9
    • 30th Nov 17, 9:58 AM
    Is £1,000 per month more realistic?
    Originally posted by sultanoflondon
    limits simply are not monthly at all - they are total.

    If you get a credit card with a 0% purchases deal it will come with a limit that they are prepared to offer you. Say it is £10k - I have no idea if this is realistic for you as I don't know your personal circumstances.
    You can spend all £10k in the first month (which would be fast stoozing) if there were enough things that you needed to buy. You would then pay the minimum payment each month - say £100 if it wants 1% - and your balance would drop by that small amount. You could spend that £100 again but no more - you have reached the limit. It is not recommended to have such high utilisation but we'll ignore that for now.
    Or, you could spend £1000 in the first month and then pay the minimum payment - say £10 @ 1%. Next month you could spend another £1000 to take your balance to £1990 and then pay the minimum of £19.90. You could keep this up for 10 months or so until you reachg your £10k limit and then you would have to stop spending. This is slow stooze.

    Until you have these concepts straight in your head you should not attempt to stooze - the payback is no longer that great so one slip up/misunderstanding of T&Cs could wipe out any profit you would make.
    I'm a Board Guide on the Debt-free Wannabe, Loans & Credit Cards boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com
    Any views are mine and not the official line of MoneySavingExpert.com.
    • ricky_v
    • By ricky_v 1st Dec 17, 9:04 PM
    • 264 Posts
    • 131 Thanks
    ricky_v
    Is £1,000 per month more realistic?
    Do you slow stooze and fast stooze at the same time?
    Originally posted by sultanoflondon
    Not on the same card as most cards only have 0% offers on either purchases or balance transfers. I DO NOT SPEND on cards where I balance transfered an amount onto it.

    Also, when you money transfer (using a no fee card) and then balance transfer, how quickly does the balance transfer occur?
    Originally posted by sultanoflondon
    Balance transfers usually take about 3 working days, I personally don't mind paying a few days' interest on a mule card while the balance transfer does its thing, however I minimise it by only requesting the money transfer when the balance transfer card company has told me it will be withing a few working days.

    Lastly, do you then close down that no fee money transfer credit card? Or do you continue to withdraw your monthly credit limit and immediately balance transfer to the balance transfer card?
    Originally posted by sultanoflondon
    I would use the money transfer card as much as the balance transfer cards allow me. For example if I can get 4 balance transfer cards with a £5,000 BT limit on each, I would request money transfers totalling £20,000 within the promotinal period (usually about 4-6 weeks). If I cannot get balance transfer cards then I simply don't use the money transfer offer (unless it's no fee and 0% interest).

    As MallyGirl says it can be costly if done wrong, so read up on stoozing and get your head around the concept of it. Also only expect £10-20 a month with a stooze pot of a few thousand, you're not going to get rich quick from this!
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