Advice needed please

StuTheDon

Hi Everyone,

I've been in and out of the boards over the last six months but my wife and I have recently begun to really focus on paying off our mortgage so I hope I can join you guys.

At the moment we have a C&G mortgage, 5.29%, balance 135,000 and the fixed deal ends next February. We have been overpaying it for some time now - I believe the normal payment would be approx 860 per month. However I am fortunate to earn a good wage and we have been paying 1500 per month (overpayment of 640 per month).

We have also built our savings up and have 15k in cash savings.

We could now afford to overpay by an additional 200 per month, meaning an overpayment of 840 per month.

I'd like some advice on what to do when our deal runs out in Feb 2010? Would an offset mortgage be best, or a long term fixed. I think our LTV is about 45% as our house was recently valued at 280-300k.

I am 32 now and would love to have this gone by the time I am 40.

Any advice would be great!

Stu

TallGirl

Firstly well done on geting your mortgage down and building up your savings. I am no expert and certainly not a mortgage broker so my advice is only from what I have found myself with having an offset mortgage.

We kind of stumbled into ours having only every been with the same mortgage provider Barclays/Woolwich since we bought our house in 1994.

Offset have worked really well for us at the same time as making regular overpayments but you do pay more than some cheap fix rates. Saying that the cost of remortgaging is quite high so if you have a small mortgage it may not be worth it and you will be better off sticking to an offset one. Well reasons it has worked for us:

- my husband is a higher rate tax payer so gave us better return than normal savings and tax free. Not so much now with the low rates.

-we keep our accounts seperate and DH is hopeless as setting up regular savings as he panics if his current account has less than £2 in it.

-We have been able to borrow back the offset to purchase a car, renovate 3 bathrooms and pay membership fees upfront. Cheap borrowing if you don't have the savings.

Hope that help but take advice and look at the small print.

StuTheDon

Tallgirl - thank you very much. I am considering getting a long term fixed - at least that way I know what I am paying!!

I am tempted by Offset - I just want whichever one will pay it off first :-)

dimbo61

I have a long term 5 year fixed offset mortgage with YBS which I took out 3 1/2 years ago and still happy with my decision now!
With lots of deals at 3.99/4.5 fixed for 5 years you need to be getting a good deal from an offset mortgage which will more than likely be at a higher rate.
Like Tallgirl said its a great way to save and borrow back to pay for big items ( cars/bathrooms/ extensions)

Radish72

I can't offer any of the advice but would just like to say Welcome aboard:beer:

dimbo61

YBS doing a 5 year fixed offset at 4.69% !
Dont know if that helps?