Best Offset Deal Around???

baloola

Dear All

This is my fist post, let me tell you that I find this forum very useful so I am glad I found it.

I am considering remortgaging to an offset mortgage as y current deal is up with abbey.

Could you tell me the best offset deals available at the moment?

My situation £113,000 mortgage on a £132,000 property and about £30,000 in savings. I am a high rate taxpayer.
Dont want to tie myself to a 2 years deal as I might be moving house in the next 12 months.

Any help and advice will be welcome.

Regards

innovate

If you just want to find the best interest rate, have a look at moneysupermarket

The offset table on stoozing.com may also be of use.

If you want the best deal overall, you need to delve into the details of each of the offers because you might find some benefits that you value with higher interest rate offers.


EDITED: just in case you haven't seen it: Martin's article on remortgaging

herbiesjp

Not sure if the following thread might help:

http://forums.moneysavingexpert.com/showthread.html?t=131396

Joe_Bloggs

@baloola welcome to the forum.
You face 6.5% (SVR) interest on your £113K from Abbey. Ybs do a BOE +0.45% offset for the term of the mortgage with no early repayment fees (4.95%). The terminology 'term' is a mismomer in this case as offsetting savings reduces the term. High tax payers are doubly penalised on the interest they get from savings compared to normal tax payers. These products are not for everyone. If you have modest savings then use your regular isa allowances rather than take the offset route. Don't get trapped on a poor SVR.
The fees amount to £499. You will keep on paying remortgaging fees for new deals and redemption fees for leaving lenders if you chop and change lender every year.
J_B. (Have you used your ISA allowances ?)

baloola

Hi Joe

Thanks for your reply. I have used part of my ISA allowance on a self selected Isa (I was counting this as part of my savings as I have £21,000 on ING direct and around £8,000 on the Isa)
So do you think I should not go for the offset??? the YBS deal sounds good as it has no early repayment fees.

At the moment I am paying 1% above bank of England rate until I find the best deal for me (I choose this tracker in the meantime to avoid the 6.5% SVR)

PLEASE LET ME KNOW IF YOU THINK I SHOULD NOT GO FOR THE OFFSET


Thanks :-)

Joe_Bloggs

I don't have the skills to decide for you what is best for you. Clearly you have cash now that is only earning interest at 2.7% (ing) net. Would this cash vanish if you bought a new property ? Short term planning and numerous fees tends to mess up ones ability to think straight. You are at 86% loan to value. Not all other offset deals are available.
Most mortgage lenders offer large short term discounts and then abysmal SVR rates. They take your money on fees for leaving/joining and consumer inertia. Give YBS a ring, explain your circumstances. If they are helpful then consider them. If your savings pot is unlikely to grow or be consumed then there are better short term, non offset rates available.
J_B.

innovate

I can't give any specific advise to your situation either, baloola - can just report from my experience with the OneAccount. This one doesn't figure with the best interest rate (5.7 - 5.95%) amongst the offsets, but it was one of the very few offsets around in 1999 when I took it out. I have now paid it off even though it was scheduled to run to 2014 (yepeeeh!!) - zero overpayment charges!

But even though I have paid the mortgage off, I am keeping the account open. This is because it allows me to instantly, and without anybody asking any questions / doing credit searches etc), to draw on a 'loan' of several tens of thousands of pounds should I need the money. This will be at the mortgage rate, i.e. usually more attractive than a loan rate.

This feature to borrow up to the agreed sum should be available on all the offsets, though I haven't looked at any of the others in detail. Of course, if you don't 'make a dent' in your borrowed sum, the lender will start asking questions after a while, and it also would cost you a huge amount in interest.

So you shouldn't need to be too worried whether you have access to your 'savings' if you put them into an offset - whilst you don't need them, they will help reduce the overall interest you pay on your mortgage, and you don't pay any tax on savings interest.

Whether you can take your offset with you when you move house, I don't know because I haven't moved. You would need to ask the lender.

If I were you, I would ask two or three to give me a written quote, then work through the terms and the numbers at my own pace, then decide whether it's the right thing to do.

BTW, I forgot to mention, there is also an offset forum over on stoozing.com (here ) - if you do go for an offset, you may be able to make larger dents in your outstanding mortgage if you stooze. I didn't - partly because I didn't know about stoozing, and even if I had known about it, I might not have felt I'd have enough time to play about with large sums of money.

innovate

Offset calculators

OneAccount

YBS

(the YBS one is very useful because it allows you to experiment with multiple different options - though of course they are all YBS products)

silvercar

My offset is with the coventry, fixed rate of 4.99% until 31/12/07.

Don't know if it is the cheapest but chose it because it is portable (can move it with you when you move house) and when the fixed rate ends you can move to any other mortgage that the coventry is offering ie there is no penalty for being an existing borrower.

Also, their customer service has so far proved excellent.

baloola

thank you very much to all of you :-)

I will ring a few lenders as suggested.

Have a good rest of the day :-)