Mortgage....offset?

hulkhogan1200

Hi everyone

Here are the numbers! I am in the UK. I have £20,000 savings. No finance or debt.
The place I am looking to buy is £80,000 + fees on top of this.
25 year mortgage. I earn (conservative/lowest estimate as it can vary):-£22,000
Assuming my parent would go as guarantor if necessary....
So what is the best mortgage?

As I have a highish amount of savings compared to mortage amount (25%)....and also as my mortgage payments will be low-ish given i am only borrowing 60k - so can probably add to my savings as i go along (allbeit only £100 a month or so) is the best %age i can find offset mortgage the way to go?

I think interest rates will stay as they are for a few more months - 1 yr. then start to rise very slow, maybe getting up to 2/3% in 3 years or so. just my two-cents worth!

Also, for someone like me what are the disadvantages of offset? I can't see too many....is the %age rates usually higher in the current climate than fixed /variable etc perhaps?

Cheers
Nic

jamesd

Compare the best offset deal you can find to the best non-offset. Even a 0.1% interest rate difference in the main mortgage would eliminate the benefit of an offset account in your case.

Even if you'd like a single deal to last the whole mortgage term you should expect to remortgage in a few years because variable mortgage rates are currently at a higher premium above Bank Rate than usual. You're likely to be able to get a better deal once there's more competition in the market.