First Time Buyer - Offset mortgage?

robc184

Hi,

I'm a first time buyer looking to buy early next year - I have £1800 monthly income with a student loan (£120 month) and looking for a mortgage. I have a family member with savings (25K) who will help if I choose an offset mortgage. Is an offset mortgage a good idea for a first time buyer - according to some research the First Direct Offset mortgage is quite good, 3.69% SVR (sorry would have the link but the forum won't let me post links as a new user!)

Or should I stay with the normal fixed rate or trackers? I was just interested in reducing my monthly payments as much as possible (probably going for a 25 year term mortgage too).

EDIT: The 25K is the amount of savings that my family member has for the offset savings account. My deposit will be 20-25% of the house value.

Any opinions greatly appreciated.

Thanks,
Rob

penguingirl

I'm not an expert- but I am a recent FTB who chose a FD offset mortgage (got it at 2.48% + BR) with a 25% deposit and I can say that I am really pleased with it. We wanted the flexibility of knowing we are paying as little interest as possible, but that we can access our money too when we want to do work to the house (desperate for a new kitchen!) or anything else that crops up. Also first direct's customer service has been really good.

I guess it wouldn't suit everyone though- we're quite disciplined with our money, but I know some people would just be tempted to spend all the money they can access.

I'm sure a mortgage-advisor would be better at telling you if it suited your requirements

Edit: Just re-read your post. Are you wanting to offset the 25k being lent to you? If you do that it can't be counted as your deposit- you can only offset funds upto 75% LTV (or less depending on your deal) with FD. You will need to have a 25% deposit that you won't be able to draw against.

dimbo61

As PG has mentioned you need at least 20/25% deposit for the first direct mortgage deals!
Having a family member put there money in an offset account will help reduce the amount of interest that you pay