OFFSET to good to be true?

Kavanne

opinions4u wrote: »

I thought you were a girl?

Shoe shops!

:rotfl:

Yes I am a girl but a bit of a tomboy. I own about 5 pairs of shoes I am a biker though so 2 of them are bike boots and they were EXPENSIVE (like £100). They were painful to buy.

I would probably spend it on new computers, etc, but I seriously think after about 6 months I would run out of stuff to spend it on apart from paying off the mortgage or upsizing my house!

teachergirl

I used to have a oneaccount. Offsetting is brilliant so long as you are disciplined ...we are. However the one account is no longer the best out there. There is a massive thread about it on this website so you can check out why there are so many disgruntled customers. (we started our account before virgin were taken over by RBS.) We have just moved to first direct with an offset and are very happy. They have great customer service and the rates are cheaper than the oneaccount!

Nice_guy

Hi teachergirl,

Thanks for the post. Does anyone have a link to this thread please?

Browntoa

thread here

http://forums.moneysavingexpert.com/showthread.html?t=1209517&highlight=virginone

martynh99

With the oneaccount your LTV decides your % rate too - might be worth reducing yours down. 110k against 180k is 61%, change that to 90.5k against 180k and you'll be under 50% LTV thus getting a better interest rate and still having 49.5k buffer in your facility

upto 50% LTV rate is 3.65%
50.01 - 75% LTV rate is 3.75%

Not a vast difference but when the base rate was about 5% it made about .5% difference.

michaels

I think FD have a better rate offset tracker although the fee may come in to play with a small mortgage?

http://www.fsa.gov.uk/tables/

Tends to be fairly up to date on what products are available

I have a strong dislike of HSBC (and by extension FD) but I suspect this is the best value product available at the moment.

CountingPenniesClaire

We also have a First Direct offset BoE base rate tracker at 0.79% for life, which we got booked in October and moved across to in February. Was a good deal at the time and came with no arrangement fee either, but is no longer available to my knowledge.

Anyway I just thought I'd add my tupenny worth in and say we moved from fixed to offset tracker and have been v happy with it. FD have been good too and their online banking shows you clearly what interest you would have paid versus what you have paid less offset.

I'm not as knowledgable as others on this forum, but 1 thing to think about is when interest is calculated on your mortgage. Ours is on a daily rate so every extra penny counts no matter when we add it in. I think some mortgages calculate on a monthly basis or less often (talk about dark ages!)

CPC

teachergirl

Hi there, just to let you know the oneaccount is also on a daily rate but first direct is still better. Our rate is a tracker 1.89 above the base rate for life. This isn't available either anymore but last weekend it was still a best buy in the Times, at I think 2.39% above the base rate for life.There is a £799 arrangement fee.(No early redemption penalty) The times online would have a table showing the best offset mortgages.

Claremac

We have a mortgage-in-principle agreement for an offset mortgage with First Direct when we find a house we want to buy. Having had no end of trouble with Barclays/Woolwich we were very impressed with the speed of agreement with FD. Applied for the mortgage on the Friday, they phoned on the Sunday(!) to query something I had filled in wrong and the the current account was set up. Then they passed our details to the mortgage department and they texted an agreement-in-principle by Thursday. I hope they will be as good after we take out the mortgage with them!

getmore4less

First Direct did have the best for a while, not sure now.

We are Barclays, one advantage of their product over FD is you can use Cash ISAs in the offset.

With this sort of surplus income you should be making full use of your ISA allowances.

The affect of keeping money in your current account for longer is maxed out at one overpayment of the full amount, so in you case it would be like borrowing £2.4k less(£3k less the mortgage payment)

using http://www.whatsthecost.com/mortgage.aspx

£110k, 3.69%(FD) 23y £592pm, 276months (23y)

£40k offset no overpayment, 148 months (12y 4m)

£2k overpayment, 46 months (3y 10m)

£2k overpayment and £40k offset, 29 months (2y 5m last payment is £600 so close to 2y 4m)

£2.4k spend money in current account for the full month, 28 months (2y 4m last payment £590)

As you can see it is the overpayment that realy does the job of shortening the loan(don't need an offset to do this), the initial offset does most of the rest and the current account part very little saving you about 1 overpayment.


Need to add on the fees for a full comparison of the deals, I just checked FD rates and they seem to have a few options that may work out cheaper than the 3.69% SVR ofset one used for this example base rate tracker offset is 2.89%.