Is Offsetting the route to be mortgage free for me?

Nice_guy

Hi Guys and Gals!

:beer:

Our Natwest 5.59% 2 year fixed deal has finally come to an end. This is our first mortgage and we have 23 years left to run

Ideally we would like to pay off our mortgage ASAP, so with this in mind I’ve been looking at moving to an offset deal.

We have approx £110,000 outstanding on our mortgage and our property is worth a 'realistic' £180,000. Our joint income into our household is approx £5k per month, and I have saved £40k to put towards paying a chunk from our outstanding mortgage.

So I entered the following details into the one account mortgage calculator:-

Value of home: £180,000
How much do you want to borrow: £110,000
Repayment method: Capital and interest
Total income paid into account each month: £5,000
How much left in account after all outgoings: £2,000
How much could you increase your repayments by each year: 0%
Savings to pay into the one account: £40,000
Lump sum payments: £0

The result?
Our mortgage will be paid off in 2 years & 5 months!
The total interest paid over this time period? £2977 - £102.65 a month.
Saving 20 years and 7 months and £51k+ in interest.

The other advantage I see is that by using an offset mortgage I will effectively have a overdraft facility of £110,000. So should the money be needed for a rainy day or future investments it seems fairly easy to access.

The possibility of being mortgage free in 2 years and 5 months is fantastic, it does seem to good to be true. So now I’m thinking I have overlooked something, or haven't realised some of the negatives that could be involved in offsetting.

Could I please ask for some advice however basic or in detail, just to make sure I haven't overlooked something obvious!

Thanks in advance!

Nice_guy

P.S - If there are any one account customers out there PM me, I think if you recommend me to the one account they will pay me and you £125.

jackomdj

see my reply on your other thread.
Nicky