Offset Mortgage - Is it really right choice?

First_Time_Buyer_7

I am first time buyer planning to buy a house at £350000 with savings of £150000 and interest only £200000 offset mortgage. First direct is offering interest rate of 2.29% pa plus BoE interest rate (currently 0.5%). It is amounting to around £465 per month. The real appeal of this deal is that there is no repayment charge and/or limit. Also this is the only option with the lowest interest rates. I am planning to payoff the mortgage (hoping all goes as per plan) in 3 years. The minimum term of the mortgage is 2 years. There is an exit fees (£150) and valuation + admin fees of around £1250. Given the circumstances, I thought this is the best option - but not 100% sure - would like to here your expert opinion. This is my first post - apologies if such topics/questions are entertained here.

hermanmunster_3

don'y know if it is the best deal but personally I am very fond of my offset mortgage - suits me.

Presume you actually are buying somewhere for 350000 .

getmore4less

£200k mortgage in 3 years at 2.79% is £5.8k pm

if you have that then great the fees a a non event(or <one month).

First_Time_Buyer_7

Yes - it is a tough ask. If I cann't manage it, then will increase the repayment period to 4 or 5 years - more interest payment, more fees etc etc.. unavoidable.

getmore4less

Just get a 25y loan then you can make your own schedule as the money comes in offset it

With an offset you just keep the money 100% offset just in case you need it or want to move minimise interest and future fees.

dimbo61

Have you considered the 3 year fix from first direct ?
It gives you security of your interest rate for the next 3 years and offsetting if the interest rates start to climb !