Offset Mortgage

coldstreamalways

I'm interested in getting one of these when I renew my mortgage next year, can any of you "gurus" tell me what I should be looking for and how to decide if it is right for me? I have googled it to death and I'm none the wiser.

StuartGMC

Have you read the MSE article?

The basic requirement is to have sufficient savings (inc Cash ISAs for some offset) and ideally also offset with your current a/c.

It used to be a rule of thumb that offsets worked well once you had savings of, say, 30% of the outstanding mortgage owing, because offsets used to have less attractive interest rates than other products. These days, perhaps 20% would be viable?

If you use a credit card for all purchases each month, then pay in full 4 days before due, all this sum will offset during the month it sits in your current a/c

Offsets can work, but I think you need to think of offset plus overpayment to really dent the MF date, and other products allow overpayment too.

I suggest you run one of the online calculators or download the excellent spreadsheets you can access in this forum to basically run a few what-if scenarios.

That said, read my thread for an insight into our situation, as you'll see from my signature, we're in an offset and we OP, hoping to clear just over 9yrs early on a 25yr mortgage
http://forums.moneysavingexpert.com/showthread.html?t=944413

dimbo61

I think having had an offset for the last 3 years that getting the best deal at the time is key to making offsetting work and the desire to clear the mortgage asap !
I have been lucky because I took a long term view and fixed for 5 years only wish I had got a 10 year deal.
I overpay and offset as much as possible.
The offset gives you more options to save ( TAX FREE ) into the offset account and build up savings while saving on the interest you pay on the mortgage balance.
I dont have or like all in one offsets like the one account and IF as they dont offer the best rates and have increased alot in the last 12 months.
So look for an offset that offers unlimited overpayments and savings linked to other saving accounts ( yorkshire BS ) if you have kind helpful parents !!!
Think long term and try for a deal either fixed or tracker that will run until the end of your mortgage.