HELP simple advice needed

jamesd

shaman,

Yes, that's right for the 6,000 but it also applies to the 400 a month you're saving.

If you tell me what your mortgage interest rate is and what tax rate you will pay on interest from savings I can suggest how to do it - limiting my suggestions to only those which actually make you better off. I'll also need to know how much you can pay off from your mortgage without penalty each year and when there is no penalty for paying the remainder off. That way I can tell you when it's likely to be best to pay part or all of the mortgage off.

If you ell me your current outstanding mortgage balance I'll tell you roughly when it can be paid off this way. The One Account calculation is probably assuming all of the 6,000 i savings and the 400 a month will be used to pay it off, so I'll calculate that way as well, so you can compare more easily. You don't really have to use it all - it's just so you can compare.

In general, if you can earn higher after tax interest raes from savings, and you have no penalty for paying off your mortgage when you have saved enough to pay it off, you'll be better off saving and then paying it off. This does assume that you won't be tempted to spend the savings, though - and some would be!

Once you know what you can do with a normal or flexible mortgage combined with savings you'll be in a better position to judge The One Account.

shaman_2

here goes I originally borrowed £15080 which was pt on a home plan (this is invested in an isa same amount costs £54.48) taken out july 1999 we then borrowed a further £7,000 on value of house for improvements. This was added to the payment we were making for the interest on above amount now currently at £189.37 at I believe whatever normal rate is the only figures i could find which were repayment fees were on the home plan the last one is 2% for repayment on or before 31/12/2002

I am just a normal rate tax payer my savings go up and down as required tho I do put £400 per month in if money is needed for larger purchases then I transfer it away from savings to normal account but the £6000 stays out and gradually increases

I should increase my savings by £4800 per year but this does not happen as holidays cookers etc etc just living seem to get in the way they are gradually going up tho currently at about £8000 hope this is enough information.
Sorry to be such a pain but tend to drift along and just pay and think its now time to get a bit more savvy but at my age tends to take longer to sink in

jamesd

shaman, sorry, I can't really add much to what I've said before because I don't have sufficient information. What I suggest you do is phone Halifax and ask them to supply you with this information, then both I (just another person) or the professional mortgage advisors would have enough information to go on to give you better suggestions:

1. What is my current mortgage balance owed?
2. What is my current interest rate?
3. Am I in a special offfer or discount period; if I am, when will that end and what happens to the rate when it does end?
4. How much can I overpay or pay in a lump sum each month or each year before paying penalties?
5. If I do overpay, when will the interest I pay change, immediately, monthly or each year?
6. (optional) Is there a lower interest rate mortgage I could switch to without penalty or cost? Just in case there is and they would change you for nothing or lower your rate just for asking the question. No harm to ask.

Those are just routine questions for them and they should be able to tell you the answers immediately, with no fuss.

shaman_2

sorry bit late been busy lol
my present mortgage is part and part part repayment for the 7,000 and an isa for the remaining capital of 15,000 as the mortgage is small would i be able to transfer mortgage to another broker and poss retain the isa as a savings plan without breaking bank?

1. £21,000
2. tracker rate 5.75% till august then goes up to about8%
3 see above
4.no penalty
5.interest calculated annually
6. have been offered a new tracker mortgage at 1.4% above base rate for a further 2 years till oct 09 with no payment penalties and interest calculated daily

I fi change mortgage provider would there be fees and would this make it a false economy?
thanks in advance shaman

james d is the best lol

Conrad

I did a thorough investigation into this.

I concluded its better to have the lowest rate mortgage and simply over pay if needbe.

The bit the offset lenders cant and wont show you is a comparison of thier offset prodcut to lowest rate products AND THAT ASSUME THE CLIENT KEEPS REMORTGAGING TO LOW RATES THROUGHOUT THE TERM (on low remo fee deals).

The apparant offset savings / early repayment illsustrations assume the non - offset client only has a low rate for the first 2 or 3 years which is totally misleading as most people will keep remortgageing.

NOTE - OFFSETT products usually pay a lot more commision.

As an example Intelligent Finance pay 0.6% to me for offset but 0.4% for standard discounted / fixed. NOW WHY DO YOU THINK THAT IS GUYS?

regularsaver1

Just thoguht i'd let you know -you say you have no penalties to leave Halifax as tie ins - you will have £175 early discharge fee and also £50 if you want your deeds dispatched. If you have no tie ins at the moment youi are free to pay anything off the mortgage at anytime.

Do you intend to keep your Halifax Home Plan and use this against your future mortgage? - as this part you only pay interest to the mortgage so as not reducing

shaman_2

no I did not know whether there were any penalties for leaving was only saying there are no overpayment penalties would ideally like to keep home plan as a saving plan for myself and pay off mortgage would that be possible? I presume that would mean transferring all mortgage to a straight repayment with increased payments?????