First Direct Mortgage Question (or Offset vs Tracker)

dodgy

Hi,

I am looking at a First Direct mortgage as we need to take a mortgage out for our new property, a substantial part of which will be repaid when we sell our old property. First Direct seem to offer good rates with no tie-in and allow overpayments, which fits the bill nicely.

They have two products of interest:

Offset Base Rate Tracker (2.89%, £799 fee)
Life Tracker Repayment (3.09%, £999 fee)

Is there any reason to go for the Lift Tracker over the Offset? If I don't add any money into the offset beyond that to cover the mortgage costs, doesn't that make it the same as a "normal" non-offset mortgage? Therefore I think the Offset sounds more attractive.

Am I missing something?

Thanks very much.

nicko33

I've gone for the Offset Tracker myself
I can't think of any advantage of the Life Tracker (except LTV)

at the moment the Offset Tracker requires 25% deposit but the Life Tracker only 20%
but I'm sure the Offset Tracker only required 20% when I applied.

I almost changed my mind to their 2.99 fixed after the latest BOE 0.5% cut
but stuck with the Offset in the end

dodgy

As the property is a new build the LTV on the Life Tracker is also 75%, so .. looks like the Offset it is!

Anon

The Offset Base Rate tracker is also for lifetime of the mortgage at X% above base rate. However, it is a different product where you can offset savings and your current account against the mortgage which, if this is going to be possible (for example, paying in the money when your old hoouse is sold) it can be beneficial as it is as if you have a smaller mortgage but will still have access to this cash in future.

I would go for the Offset myself as currently cheaper, and Offset features as well.

Anon

kazd

Our mortgage with First Direct has just completed today, I just noticed whilst online that the rate we got seems to have disappeared. We got 1.89 above base rate, offset tracker.

I know there were other people on this board who got an even better rate, I am taking a gamble here as we paid a hefty redemption to get out of our 5.79% bank of scotland rate (had 3.5 years left to run). I am hoping this is an indication that rates will stay low for a while and we will just shove as much money at it as we can. Have decided to actually make overpayments rather than just have it sitting in the offset savings, although will still have my normal savings pots for xmas, car etc. However, come October my car loan finishes and that will be another £300 per month that we can throw at the mortgage.

just buy switching I have shaved four years off our mortgage.

Anon

The 1.89% above base changed earlier this month on the day interest rates dropped to .5% (their rate rose to 2.39% above base, retaining the 2.89% rate overall, no doubt to protect their profit margin).

Anon

jayremoh

ive recenlty got the offset, and even though i didnt quite meet the requirements on the affordablility or the LTV, they still processed on the back of my 'excellent credit rating'

top company.

iven if you dont need the offset, do it anyway. no reason not to.

dodgy

Thanks for the advice. I did just that, went for the offset anyway. If I don't "offset", who cares - it's a better rate with a lower set-up charge.

Had to go through the application again, but they were really nice about it.