Why didn't I max out my offset?

twista_2

Hi,

I'm about to think about moving to another house, and we can transfer our current mortgage @ 0.79% above BR to this house.

Sounds good eh?

But I only took this mortgage out last Nov 08, and only for the remaining of our current mortgage of £60k.

- now if I had taken out the maximum for my wage they would let me, more than I needed to cover for the mortgage, this extra would just sit there and not pay any interest.

- AND when I come to the new mortgage for the new house I will still have the £100k+ amount available at the 0.79% above BR...

Now I am only able to offset up to 60k at 0.79% and any more will be at the latest higher rates...

Have I not seen the light in Nov 08?

No point in crying over spilt milk, but do others think that I could have handled this better and benefitted over maximum out my offset? - knowing that I would be needing a bigger mortgage later this year...

Is this a good thing to max out offset trackers, if you don't use it, it doesn't cost you anything - and in the end, gives you more options...?

Regards,
Twista.

Trying_to_be_good

Ah, hindsight's a wonderful thing.

Partly it would depend on any other credit you would want to take out during the term of the mortgage, but on the face of it, I think you're right - having the maximum amount you COULD borrow, but offsetting it all so it's just there.

I think some of the accounts can reduce the borrowing facility during the term, but not sure how this works. If it's that you haven't used or have offset part of the mortgage, it would totally negate the benefits. My logical head says this could only be legal on a current account-type mortgage (i.e. a big overdraft) mortgage, as with an offset they exist as separate accounts. But you've got me thinking now...

getmore4less

One trick with this sort of borrowing is to set the end date as far in the future as you can(mortgage free date) and set it up as a repayment so the max amount you can extract is about right to still pay off in that time.

We set ours so it finishes when I am 60. the amount we could extract to move or do work is slowly reducing but would still be a comfortable mortgage as long as I am workling.