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What would you guys do?....

I have spoken with my financial advisor as my 5 year fixed with Nationwide is up. I have moved to 2.5% and my payment is down from £980 ish to £750ish

I was consisering an offset as I have £35k in savings and I might be glad to use this in the near fututre. My advisor has suggested the following to consider:
  1. Buy to let property
  2. Pension
  3. Share isa etc
  4. Off set mortgage
Basic details are, my house is worth £300k, I have a mortgage of £135k and savings of £35k. I am debt free and between me and other half we net £4,000 per month

I also have £5k of "overpayments" against my exiting mortgage

I am 36 with only basic pension provision, but I have 3 small kids so we do need cash to have fun and music lessons etc

What would you do? I thought offset but my interest would increase??? I like btl as it adds to pension provision for 30 years down the road...or...can I overpay my NW mortgage with no penalties?

Thanks for your thoughts :)

Comments

  • koexelek
    koexelek Posts: 7,847 Forumite
    I would hang on to that 2.5% rate for sure.

    You can pay money off whenever you like now, without penalty, and you are not tied in anymore... so can remortgage at the drop of a hat if something better comes along.

    That SVR is so good, Nationwide are desperate to try and get borrowers off of it
    I am a Mortgage adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • LEWKI
    LEWKI Posts: 121 Forumite
    Thanks koexelek

    If I overpay today and put all my money into the mortgage it will be £100k flat at 2.5%. If I need to get say £10k back in a hurry, can I draw it down again?

    I am sure I could before when I was overpaying? If I can, I maight as well do this asap to save interest and start massively overpaying.

    Again thanks for any help
  • koexelek
    koexelek Posts: 7,847 Forumite
    I think you can draw any Nationwide overpayments back at any time.... but check the small print and don't take my word for it :o
    I am a Mortgage adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • LEWKI
    LEWKI Posts: 121 Forumite
    Just phoned nationwide. Yes I can overpay and get my overpayment back at any point. So thats great news and I will do this in the first instance.

    However,..........

    I asked what my repayments would be and the lady said £100,000 mortgage at 2.5% over 19years and 11months was £431.61/month...

    But when I put 100k at 2.5% over 20 years in the mortgage cal it come up as £529.90. Which is right?

    This is a huge difference in payments
  • Peelerfart
    Peelerfart Posts: 2,177 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Yes I got £529.90 as well. Methinks lady at Nationwide has a dodgy calculator
    Space available for rent
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    As well as the saving how much surplus do you have each month to top this up?

    If the money is allready in ISA's then if you want to offset you are best looking at one that allows ISA's to be offset.

    I would start filling cash ISA's and moving the money around each year to chase the rates.

    BTL do you want to become a landlord?

    ovepaing your own mortgage is part of pension planning it frees up future earnings and reduced the cost of shelter.
  • koexelek
    koexelek Posts: 7,847 Forumite
    Peelerfart wrote: »
    Yes I got £529.90 as well. Methinks lady at Nationwide has a dodgy calculator


    Me too, but I'd accept the £431 if the woman guarantees it will still be fully repaid at the end of the term ;):cool:
    I am a Mortgage adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Keep the 2.5% mortgage and save any surplus at more than 3.125% gross (basic rate taxpayer).

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • LEWKI
    LEWKI Posts: 121 Forumite
    Thanks all for your help. I have decided to put all my money against the mortgage and start the savings pot moving again.

    Does anyone know if the Nationwide will continue to take my current £750 per month all will they automatically drop to £530?
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