Offset Mortgage or Simply Pay Off?

IamWood

I have a fixed rate mortage £70,000 with bank Natwest currently. The fixed term is ending in May. I've also managed to get saving £70,000 recently. I wonder whether it is a good idea to pay off the mortage, or just take an offset mortage with Natwest again? To take the offset mortgage, I may have to pay arrangement fee around £300. Is it worth it?

As far as I can understand, I should not pay any interest if you have the same amount of saving against the offset mortage. Considering the current economic situation, is the money safe against offset mortgage? Is there any other better option for me.

Any advice would be really appreciated!

de1amo

just out of interest--i got offered a no fees offset at 4,39pc--i am curious about this product -do they pay 4,39 on the offset??? i think not !

dimbo61

Any money in the offset account saves you the same amount of interest TAX free that you pay on your mortgage rate.
Thats why offsets are so good and I have one

dimbo61

Bad point ie you have £70K in savings in case you lose your job SEE benefits
Good point cheap way to borrow money !
Take money out of offset account to buy new car/ TV/ kitchen Interest rate same as mortgage rate and flexable payback

IamWood

dimbo61 wrote: »

Bad point ie you have £70K in savings in case you lose your job SEE benefits
Good point cheap way to borrow money !
Take money out of offset account to buy new car/ TV/ kitchen Interest rate same as mortgage rate and flexable payback

Good comments. Is there any hidden feed for the mortgage?

dimbo61

Think you mean FEE ?
No not with YBS and can offset 100% of the mortgage balance !
Some lenders dont allow this

getmore4less

dimbo61 wrote: »

Bad point ie you have £70K in savings in case you lose your job SEE benefits

With some offsets you can avoid the benifits/savings trap.

Barclays,oneaccount for sure probably others.

IamWood

dimbo61 wrote: »

Think you mean FEE ?
No not with YBS and can offset 100% of the mortgage balance !
Some lenders dont allow this

Sorry for the typo. Yes I did mean 'fee'.

barrybarryr

In my opinion just pay off the mortgage.

dimbo61

Glad you managed to save £70k but why not just pay off the mortgage and pay no fees and then build up your savings for your future !

IamWood

dimbo61 wrote: »

Glad you managed to save £70k but why not just pay off the mortgage and pay no fees and then build up your savings for your future !

Thanks, I've decided to just pay it off -- simple and clean. I look forward to the debt-free life :j