Offset Mortgage and Money Protection

Mr_Frugal

We have just taken out an offset mortgage. Collectively my wife and I can offset just over £100k of the £150k mortgage. The mortgage is with First Direct.
Are we safe offsetting over £100k (ie putting it in a account that is linked to the mortgage) ? Ie with only £50k being 100% protected do we need to split the money so that it is £50k in each of our linked sole accounts or can we put it in our joint account ?

Secondly if we build this to £120 and the bank went under would we be at risk on £20k or would we be able to argue that as the money was all offset against a debt (ie mortgage) that actually we could offset all 120k against the 150k and just walk away with a 30k debt ??? Is that how it works or do we just keep it at the £100k and use any money to repay the capital ?

atlantis187

If the bank went under your mortgage would just reduce by the full amount offsett even if its £120k

Thrugelmir

First Direct is owned by HSBC so should be secure in any event.