Offset Mortgages against savings?

buckman

We are currently looking for a new mortgage as our other is about to expire.

We currently have a deal in place with NR, which we are thinking of for December, but have started to think of an offset mortgage?

I believe this is whereby myself and my wife put all our money into one big pot (account) plus our savings ie: £40,000 and this counts against our mortgage?

Are many people on these? and what are the benefits/downsides?

Our mortgage is currently £206,000 and we are overpaying slightly at around £1460 a month..

Would this style of mortgage be a good idea? and does anyone recommend the best lenders at the moment for these?

Thanks:o

Let_Us_See

Overpaying at £1460 per month? Lucky you.

Offsets are fine if the interest you are receiving on your savings is lower than your mortgage rate. It effectively allows you to reduce your mortgage balance, (or overpaying) whilst providing full control of your capital. In the past the downside of Offsets were uncompetitve interest rates , but there are now competitive rates available.

getmore4less

They can work well if you have money to offset that you want to keep access to but cannot get a good rate on.

First direct have a good one.

You have to be disaplined not to spend.
Some the rates are a little higher

Once you change you tend to not want to change again so save on future fees.

0% credit cards can provide free money to offset, look up Stoozing.
(allthough BT cards are hard to find 0% purchase ones are available)

dimbo61

I have a Fixed offset mortgage with YBS and happy with it
It also have a feature called offset plus where family & friends can open savings accounts offsetting your mortgage.
First Direct have some of the best rates at the moment.
Great flexibility as you can build up your savings while offsetting the mortgage interest!

buckman

Thanks for your replies..

I should say that Overpaying at £1460 isnt the full amount! I think our mortgage is something like £1350 but have carried on overpaying this little bit extra.

Will look into YBS and First Direct - thanks

buckman

Just had a chat with the One account and it seems in principle a good idea, offsetting our savings against our mortgage, and having one joint account for everything...

Anyone else with One Account?

dimbo61

Like everything check out the rates carefully !
Are they offering you a BOE tracker rate deal or a fixed rate deal
Some people on here not happy when the one account did not drop rates when BOE rate went down.