Offset advice required

Mr_Frugal

With the economy the way it is and savings accounts offering so little we are looking at getting an offset mortgage deal on the completion of our current term (another 5 months yet) and throwing all our savings at it.
We have a mortgage of circa £150k and will look to throw £80k at it in to the offset savings accounts (leaving a payable balance of £70k on the mortgage).
I have 3 questions re the above:-
Firstly, can we open several accounts within the nominated banks offset 'umbrella' (ie open a current account each and have 2 savings accounts) or do we have to put all the £80k offset into 1 pool ?
Secondly (and most importantly), with the current limit of protection on savings being £50k - if the bank went under would we lose the excess on our savings (ie £30k here over the £50k limit) and then still have a mortgage debt of the £150k ? Or do they offset the savings against the morgage so that if the bank went we would only owe the £70k deficit on the mortgage ? This will obviously be more important as we get nearer to paying off the full balance and have £140k savings (would we then just owe £10k then on a bust bank or would we lose the excess savings and then still have the debt of £150k ?)
Thirdly, as a married couple do we get £50k limit each ? If so, under an offset deal would we have to open the seperate accounts in our individual names or joint names ?


Hope that all makes sense, thanks in anticipation,

Mr_F.

Anon

Mr_Frugal wrote: »

With the economy the way it is and savings accounts offering so little we are looking at getting an offset mortgage deal on the completion of our current term (another 5 months yet) and throwing all our savings at it.
We have a mortgage of circa £150k and will look to throw £80k at it in to the offset savings accounts (leaving a payable balance of £70k on the mortgage).
I have 3 questions re the above:-
Firstly, can we open several accounts within the nominated banks offset 'umbrella' (ie open a current account each and have 2 savings accounts) or do we have to put all the £80k offset into 1 pool ?
Secondly (and most importantly), with the current limit of protection on savings being £50k - if the bank went under would we lose the excess on our savings (ie £30k here over the £50k limit) and then still have a mortgage debt of the £150k ? Or do they offset the savings against the morgage so that if the bank went we would only owe the £70k deficit on the mortgage ? This will obviously be more important as we get nearer to paying off the full balance and have £140k savings (would we then just owe £10k then on a bust bank or would we lose the excess savings and then still have the debt of £150k ?)
Thirdly, as a married couple do we get £50k limit each ? If so, under an offset deal would we have to open the seperate accounts in our individual names or joint names ?


Hope that all makes sense, thanks in anticipation,

Mr_F.

From what I understand:

1. Depends on the lender/nature of the offset account, some have a number of pots, others (One Account?) just the one.
3. Yes - £50K each. First Direct let you have individual and joint account depending on your preference (therefore if joint mortgage, both can have individual accounts and joint offset against the mortgage).

Not sure on 2 - someone else will need to advise us both (as interest to know the reply!).

Anon

getmore4less

Currently you offset savings against debt so OK on that score just lose the liquidity

Some accounts it does not matter if you structure it right anyway.

Barclays(we have this) allow multiple accounts(individual and joint) and ISAs so handy if some of your savings are in ISAs no need to cash them out.

You also get a reserve account with an overdraft which increases if you overpay, that will also protect the money if netting goes away. The reserve is at the mortgage rate if offsetting.


First direct tend to have the best deals but not familiar with all the details of how they operate

Avoid the one account it has never been the best on offer.