Current Account/Offset Mortgage

silvercar

Most have a clause that says they will not pay you any interest if the amount offset exceeds the mortgage outstanding value. This implies that you can put as much in the offset as you like.

If you had the initial amount fully offset and continued to make monthly payments you would end up with a situation where the offset savings exceeded the borrowed amount.

MM2005

Just called YBS, you can have up to 100% of the mortgage value in savings. On the fixed rate offset they only allow you to overpay by 99% of the monthly amount, which is more or less what I wanted anyway. Having said that I now intend to put the overpayment into the savings account as opposed to actually paying it off the mortgage, so no problem.

Asked about using the e-ISA to offset also but I'd have to withdraw that money and put it into the savings, so might as well keep it in the e-ISA I think as it's obviously tax free.

Right, unless anyone thinks 4.84% fixed for 5 years is not the thing to do I think I'll go with this.

My current mortgage deal finishes at end of March - I guess it's OK to go ahead with the application now, seeing as they'll need valuations/legal work etc. done?

silvercar

IMO 4.84% fixed looks a good deal.

No harm in getting everything in place, I'm sure they will ask you what date you want to complete on the deal.

MM2005

silvercar wrote:

IMO 4.84% fixed looks a good deal.

No harm in getting everything in place, I'm sure they will ask you what date you want to complete on the deal.

Had another look around (it's funny how you notice different deals which appeal!) and now have the following possibilities:

YBS (4.84% fixed for 5 years)
First Direct (4.89% fixed for 5 years)
IF (4.80% - +0.30% above BOE - for 3 years)

Obviously the fixed gives peace of mind and looks OK on both YBS and First Direct. However the shorter term tracker seems good too, seeing as interest rates are probably going to drop (I saw some forecasts saying possibly to 4.00% by year end). Hmmmm!

They all have online capabailities (which is a must for me!) - I used to bank with FD so I know they're online system was good. I've read the YBS have only recently introduced online functionality (and the options seem OK). I assume IF has good online capabilities?

OK, any opinions on the 3 above. I suppose I am looking to get as near to paying the thing off (or at least having 100% savings v mortgage remaining) ASAP. Realistically this could be 4-5 years, so I think the fixed might be decent over that time frame (i.e. 5 years).

Any expierences/thoughts with the 3 above? I promise I will then go away and leave you all along (for a while anyway)!

bockster

yes, no harm in getting things moving once you've decided.
i very recently completed with ybs and was worried about things moving too fast and incurring penalties from previous lender, but, 2 things to stop that;-
1, they can't complete until you sign the contract.

2 the solicitor will ask you for your prefered completion date.

2a, you can (like me) holdback paperwork at any time to make sure

MM2005

Sorry to bump a bit - any thoughts on the deals I mentioned above? What's opinions on interest rates moving over the next 3 years? Wondering whether to go with the fixed or the tracker. Also, your experiences of the online functionality of YBS and IF would be appreciated.

Cheers
MM

Fruitcake

Sorry if you've already thought of this. With an offset mortgage, pay as many of your bills/purchases by credit card not debit card.
This means you can stooze as much as possible and keep the money in the bank for longer to offset interest until the cc bill arrives.

Fruitcake

You Only Listen To Me When I'm Wrong

MM2005

Fruitcake wrote:

Sorry if you've already thought of this. With an offset mortgage, pay as many of your bills/purchases by credit card not debit card.
This means you can stooze as much as possible and keep the money in the bank for longer to offset interest until the cc bill arrives.

Fruitcake

You Only Listen To Me When I'm Wrong

I hadn't thought of it but will try and do this as much as possible. Also looking into the other stoozing possibilities too...

fluffybunny_2

have a look at Woolwich Switch and Save

My current account, savings, stooze pot and cash isas are with Barclays and they all offset. Yes, my isa and also my husbands offset. Each year we can top up with £3000 each and they will offset.

There is no limit on overpayments... you can pay what you want, when you want and you can make overpayments online.

Each day, i go online and can see whats what. You can click your mortgage and it tells you how much interest you saved last month on your mortgage and also the total to date.

I think the rate is base rate plus 0.59% .... i dont mind that its variable because i'm not paying interest at the moment. Even if I was, I cant see anything drastic happening within the next five years.

I like Barclays/Woolwich because, on one page, everything is there. Mortgage,current account, isas, stoozing.

HTH!

Daniel_B

MM2005 wrote:

Had another look around (it's funny how you notice different deals which appeal!) and now have the following possibilities:

YBS (4.84% fixed for 5 years)
First Direct (4.89% fixed for 5 years)
IF (4.80% - +0.30% above BOE - for 3 years)

Between the first 2, I would be inclined to go with FD, primarily because they are excellent, and I think it is worth paying the additional 0.05% interest for.

However, if IF (excuse the pun) aer any good, I have no experience of them, then I would be very tempted to go that route - I guess there is an element of risk there, but it mostly depends on what you are willing to gamble.

Might be worth checking out the penalties if you wish to get out before 3 years, and work out what you could save over the other ones - ie work out what interest you would pay, and then work out with the IF one, what would happen if the interest rates dropped (they can't go far down) and what would happen if they went up higher than the other ones.

Good luck with your final decision

Dan