Mortgage Advice Required

Flamer

Two years ago I took out an £85,000 mortgage and I also have apersonal loan of £25,000 which was used for various things such as replacement car and jobs on the new home.

Whilst I have been paying these quite comfortably and hopefully continue to do so, I was hoping someone could offer advice on changing my finances.

My 2 yr deal has now just finished so I owe around £82,000 plus the loan. I am also looking to either see my existing lender to see what deals they can offer or see my own bank to see if they can help, I do prefer things all in one place if possible.

However, I do always have around £2000 in savings which perhaps I should use to pay off some of the above.

I have looked at those mortgages with the One Account and First Direct in the hope of taking years off the payment term. I also feel disciplined that if I can see the figure coming down, the incentive to have more savings will be there.

Alternativley, should I be looking at something different.

I am quite willing to move both mortgage and bank accounts elswhere if needed.

My house is currently worth around £250,000, which I suppose does help.

Any advice would be appreciated.

Rabiddog_2

Sell up and rent for three years, then buy a better house for less money?

luckyfool

Rabiddog wrote: »

Sell up and rent for three years, then buy a better house for less money?

This advice seems unhelpful and unresponsive to the OP's question?

luckyfool

If you are willing to move everything and like the idea of an offset type account then moving to First Direct, or to Woolwich (on their Term Tracker Offset option) would be a valid option. You then get the benefit of being able to offset your £2,000 savings without having to throw it into a mortgage and potentially lose access to a rainy day fund.

You may find you can get a better rate though without the offset facilities - e.g. Woolwich offer a term tracker at a lower rate if you don't need to be able to offset. You can still overpay the mortgage penalty free (by standing order or with lump sums) and benefit from paying your mortgage offer earlier. Effectively you would need to decide whether the ability to get overpaid money back and the other bells and whistles of an offset account are worth the extra cost.

Flamer

Thanks for the advice. My worry was that only having 2k would not make any difference and I would be wasting my time with this type. Having looked around, the first direct account does look very good compared to the One Account. However, I guess you need to see what sort of figures they come up with in real terms.