Help Needed !! Mortgage Offset Question

mortgagemayhem

Can anyone out there help me with this offset question ?

if i had a 100k mortgage, interest only, interest payments made monthly by direct debit.

then if i saved 90k in my mortgage offset account and the mortgage company charged me £50 a month for this facility.

then my outstanding 10k would rise by £50 per month accordingly

Would my 90k offset remain the same or would it reduce monthly by the £50 fee ?????

i ask as this is what is happening to me and the mortgage company insist its correct !! but i cannot agree, surely if my account is increasing by the £50 fee then reducing my offset by £50 too is charging me twice ????

am i right or wrong, if wrong why ??? thanks in advance.

Mrs_Bumble

Where is the fee being charged?

mortgagemayhem

the fee is charged to my outstanding account, each month i get charged approx £50 interest and £50 credit fee, the interest is paid by dd so the account outstanding rises by the £50 credit fee, yet my offset figure drops too ?

Mrs_Bumble

can see why you are confused!

Who is the offset mortgage with?

mortgagemayhem

mortgage Trust, been on the phone with them today and they checked it with there supervisor who insisted it was correct, i'm sure its not but dont know what to do.

Mrs_Bumble

Is this a buy to let mortgage? I have never dealt with Mortgage Trust as don't work in buy to let at all, so have never come across this. It looks like they use the current account approach is that correct? I can't quite fathom what you are being charged a fee for?

When you spoke to the superviser today did she clarify what exactly you are being charged for each month? What this fee is?

Have you had a look at your original mortgage offer does it mention these fees?

Did you arrange the mortgage yourself or did someone arrange it for you? If so can you go back to them and ask for an explanation?

Sorry I haven't got an explanation for you, I am intrigued tho and happy to look at the offer for you to see if it holds any further explanation, let me know.

Hope someone out there has more experience of Mortgage Trust for you!

mortgagemayhem

Hi, thanks for your reply, the fee is legitimate and i understand and accept it, its a fee for having more than 20% of the loan in the offset facilty, works out to be approx £50 per month, its added to my outstanding balance but then they take it off my saved amount, its like my example, 100k loan, 90k offset, 10k owed, £50 fee charged each month to my owed account and deducted from my 90k offset amount aswell.

Mrs_Bumble

Maybe a lightbulb moment! Is it a current account mortgage? Is your interest rate around 6% and are you making a separate monthly mortgage payment or is the £50.00 fee actually the interest payment for the mortgage on the £10K that isn't offset and is being deducted from the current accounts/saving account.