OP- Term or Monthly Repayment

StuartGMC

Missed the fact that this low rate is fixed for 10yrs as it was in the signature

Yes do use savings to improve on position vs this as dimbo61 correctly highlights, that £500 per month would work very well.

Perhaps Dimbo can comment, but, the only risk is one of having large savings in the event of being redundant which may preclude some allowances and you are not allowed to deliberately pay in savings against mortgage in this situation? If you have overpaid throughout then it isn't "deliberate" reduction?

uzubairu

dimbo61 wrote: »

Good planning just remember with a great fixed deal of 4.79% of 10 years that there will be a number of saving vehicles paying more than that even after tax.
So keep filling the cash ISA,s for both of you and pay into any good regular savers ( does that regular saver allow £500 a month each ! )
Best return for your money

I have a HSBC current account and the regular saver account is linked to it.

Maximum is £250.

Using Locoblade's spreadsheet, we'll owe £30K at the end of the fixed rate period. We've saved about £8K already in our ISAs.

StuartGMC - I think my husband shares your view and still wants the £500 overpayment into the mortgage to continue, given the current climate.

dimbo61

Yes stuart is right to point out that if you have a large amount in savings and lose your job the nice benefits people expect you to live off your savings untill its below a certain level £6000 I think !
Before you can claim benefits
If you had say £50,000 in an endowment to pay off a mortgage then you could use the endowment to pay off the mortgage when it matures and not get into trouble with the benefits people as that is what the endowment was intended for.
Having thousands of pounds in ISA,s is not the same !
With ISA,s paying up to 7.32% natwest over £27k its still worth saving into them as your deal is 4.79% for another 8 years.
please be aware of the benefits limit

dimbo61

At the end of the day I also overpay my mortgage and its fixed at 4.74% so if happy to overpay then do that and save as well.

StuartGMC

Dimbo61 thanks for the confirmation; as we are offsetting around 60%, it does raise concerns for me, because we have other investments in ISA Stocks & Shares, although these are not needed for the mortgage (and of course are "what they used to be" :rolleyes:) they are additional funds which could impact us.

Oddly enough, was going to cancel redundancy cover on mortgage late 2007 as there was so little left, but have for now continued to pay it; I will look during 2009 wrt continuing and also if we should pay down mortgage even faster whilst I have a job. This won't change financial costs of mortgage but would reduce funds which then the Government couldn't tell me to burn in day to day expenditure... decisions decisions

(We also overpay already too!)

dimbo61

Who now has a secure job ?
If you have no debts and mortgage paid can you live off hand outs from the government which we have all paid into at the end of the day.
Lots of people , councils, charties, companies and others had money tied up in icelandic banks and dont talk about the housing market, bank shares, BTL etc

StuartGMC

Came through last recession after pay freezes, attempted pay cuts by management, redundancies of colleagues then company closure... we got no redundancy from the company receivers which many people forget these days can occur, so I have no illusions over any job being safe. Even bought at a time when repossessions were still occurring in 1994, so the concern over what can happen is, for me, a real one.

Yes without debts you can get by and at least no one can take your home away. The only reason I note 2009 to drop redundancy cover is that we should be 100% offset but, it is a concern that these funds could be forced then to be called upon if redundant and then we would start to then incur mortgage interest again...

Interesting issues to resolve for me anyway

dimbo61

Can you pay down your offset mortgage to below £6000 and therefore have a much smaller offset pot ?
Save into ISA,s and other savings vehicles, top up pension, clear any other debts.
I also have an offset mortgage but now have my savings in ISA,s as getting a better rate.

webwalker

I always paid off as much as I could on my mortgage (simple repayment mortgage no penalties) but hey I cleared mine in 1994 never looked back.