First Direct Offset Mortgage

M0neysav3r

Hi All

We're coming up to the end of a deal with Halifax and have started to look round at various deals and have been looking more and more at the First Direct Offset Tracker, I believe they have withdrawn this rate now but thankfully they have sent everything in writing etc and state that it is now valid for 6 months. It tracks at 0.49% above BoE.
From what I understand I need to have a FD account to get this mortgage and was therefore going to open an account just to put the mortgage money into. We don't have much in the way of savings so not much point in having an offset mortgage but the rate we've been offered is whats attracting us, along with the fact we can overpay every month easily.
Also, the application they have sent through is based on interest only repayments, I phoned back as I thought they'd sent the wrong quote but was told thats how they work it, thats the minimum amount we have to pay each month and then we can top up with however much we like....

Does this sound about right and is this a wise deal to go for?

Any advise appreciated.

straddie

FD have had some of the best trackers on the market over the last couple of months - if you still have access to that deal you'll probably be hard pushed to find a better deal out there at the moment (but I'm not a broker so I'll happily stand corrected).

Unlike other offset mortgages, with the FD deals it doesn't really matter whether you actually offset or not - their rates are competitive with non-offset mortgages, whereas with some of the other lenders (eg the One Account) you are effectively paying a premium in the form of a higher interest rate for the ability to offset, so in your case if you haven't got much to offset it wouldn't be so worthwhile for you. With FD, whether you offset or not, the deal is still good - the offsetting is just a bonus!

You are right about the interest only thing - effectively the mortgage is an interest only deal charged to your First Account, but on application (or afterwards if necessary) you can ask them to set up a standing order on top of this to cover your capital. Or you can just pay the necessary capital into one of your linked accounts, it'll have the same effect (although you may prefer to have it creditted to the mortgage account to prevent you from spending it!)

Another nice thing about FD is you can borrow back any repaid capital at any time, so if you are likely to need more lending in the future, you've got access to money without having to go through credit checks etc which might prove prohibitive in the current climate.

Our remortgage with FD just went through yesterday and so far so good!

lisyloo

FD are an excellent lender and this is an excellent deal so you should bite their arm off.

Also FD don't have a floor or a collar.
Some lenders will stop when rates go down e.g. Nationwide stop at 2.75%, but FD do not have a minimum, so I can't really stress too much what a great deal this is.

SwitchyChick

We have just started our FD Offset Mortgage.
Would suggest switching your current account so that ANYTHING sitting in there will offset against your mortgage & so bring down your interest payment. If you can "overpay every month easily" it would appear you have sufficient income to make this worth doing.
Did you ask them for an interest-only quote (we did)? I'm pretty sure you can qet quotes for repayment as well.
Be careful: you will either need to have another product set up to repay the capital (ISAs, etc) or make sure your overpayments are sufficient to do this.
Good luck!

damo6_2

Lucky you getting on that rate-i agree you should bite their hands off

i missed the boat on that one but am still looking at going for an FD mortgage-i have been offered both the tracker at 0.99 above the base rate so currently 5.49% and the the offset at 5.5%

As we don't really have anything offset at the moment (though i do like the idea of it moving forward) i am thinking of taking the tracker bearing in mind that if the BoE does cut the rate soon they don't have to pass this onto their standard variable rate but do with the tracker

do you think my thinking on this is logical or should i be looking more at the offset (even though i would make payments to it as though it was a repayment mortgage)

any help much appreciated

oh and sorry for hijacking your thread but i didn't think my question worthy of a whole new one-hope you don't mind!

maninthestreet

M0neysav3r wrote: »

Hi All

We're coming up to the end of a deal with Halifax and have started to look round at various deals and have been looking more and more at the First Direct Offset Tracker, I believe they have withdrawn this rate now but thankfully they have sent everything in writing etc and state that it is now valid for 6 months. It tracks at 0.49% above BoE.
From what I understand I need to have a FD account to get this mortgage and was therefore going to open an account just to put the mortgage money into. We don't have much in the way of savings so not much point in having an offset mortgage but the rate we've been offered is whats attracting us, along with the fact we can overpay every month easily.
Also, the application they have sent through is based on interest only repayments, I phoned back as I thought they'd sent the wrong quote but was told thats how they work it, thats the minimum amount we have to pay each month and then we can top up with however much we like....

Does this sound about right and is this a wise deal to go for?

Any advise appreciated.

I switched my mortgage to FD in September (already had a current account).
Via their online banking, you can easily make a one-off payments from your FD current account to your mortgage account.

allan673

im with first direct, ive set mine up for traditional repayment style.

i also overpay each month, f.d are great !

amy2468

My husband opened an account with First direct 12 years agao and swears by them says they are the best bank out there, dont think our mrotgage is with them though but maybe it will be if the offers good i know ours is about due for a change

Amy:j

Johnnyb_2

Hi, I've been with first direct for 7 years and have had my mortgage with them for the last 3 years! i work in a bank and can't promote first direct enough, I've even referred friends and family too them! The best bank out there.. If I've been skint I've been able to dip into my account and it's carried me over until pay day..

I also secured a mortgage with them 4 months ago, which was a fixed rate deal. I now need to obtain a deal wthin the next 4 weeks, should I go onto the variable or the tracker, I'm 60% tracker 40% variable.. I believe there's another interest rate cut due soon!

first Direct 'Rock'.. It's like it say's on the advert 'Speak to real people'!!!

Regards

Mattfoo

First Direct have been superb during my re-mortgage over the last couple of months. I caught the 0.49% Offset Tracker just in time and completed yesterday.:j

I was previously with The One Account and completely lost faith in their rates, when they began for the first time not to pass on the drop.:mad:

It has been so very easy to switch and they sorted out all my direct debits for me. They made some very good suggestions as to helping me consolidate some existing credit and sure enough I came out of it in much better shape !

1. I have saved £200 a month in interest alone compared to One Acct.
2. Im paying off my mortgage 3 years earlier than with the One Acct.
3. I like how FD keep all the accounts separate - One Acct lump it all in one.
4. There are no overseas call centres ! Just plain old people (cheerful) from Blighty !
5. It tracks the BOE rate and changes the same day.

I know rates will eventually go up during my lifetime tracker, but hey ...
First Direct was the best financial move I have made. Good on you FD.

disney_cjd

We are just remortgaging from the One account to FD on this tracker. Seems great deal to me. You can also take a loan over the extra equity I think, so if you have not borrowed up to the 80 percent LTV you can take that as a loan.

Yes its all interest only but that will allow you to set up a SO that pays more so you pay of the capital and they will work out that you need to pay to meet goals if you ask.

One question I do have though, does anyone know if this mortgage has a "collar" rate that I read about yesterday. So that there is a rate below it will not fall regrdless of the base rate? I have asked FD also and am waiting for a response.

Thanks
Craig