Two more building societies increase interest rates

carolt

chucky wrote: »

well.... i've provided quite a few posts to this thread... unlike yourself...

but now that you mention it again... First Direct have just put out a mortgage that lowers their current rates and is fee free...:T

seeing that you're showing such an interest in mortgage rates at the moment... i'm very surprised that you've missed it...
they're a bit more of a bigger player actually a much bigger mortgage lender in the UK mortgage market than your little building societies that you started your thread on...

That's excellent news, chucky.

Harry_Powell

chucky wrote: »

i'm a big fan of being able to make over payments - 10% a year is on mine too with Halifax. i only wish that it could be more...

I'm glad you've said that because I've been looking for a worthy adversary to discuss the merits of overpayments. I commented on a couple of MFW threads but didn't get any takers.

My stance is that I think anyone who overpays on a mortgage is bonkers (there, I said it!), except for people like me who are trying to improve their LTV in order to get better mortgage rates.

Right, let battle commence.

chucky

Joeskeppi wrote: »

Mine allows 10% but apparently I can't just increase the monthly amount, I have to go into the branch and do it, seems silly.

i think that's the same as mine to be fair - i have to do it as a capital repayment.

so i dump it into a savings account each month so that i've got that discipline and the plan is to overpay each year.

they even charge you a fee if you over pay over 10%!!!

chucky

Harry_Powell wrote: »

I'm glad you've said that because I've been looking for a worthy adversary to discuss the merits of overpayments. I commented on a couple of MFW threads but didn't get any takers.

My stance is that I think anyone who overpays on a mortgage is bonkers (there, I said it!), except for people like me who are trying to improve their LTV.

Right, let battle commence.

my personal position is that i took out very large mortgage amount because i've got cashflow coming in this year and next year from other investments

i don't want to be in a position of having that large mortgage but i had to do it to be able to buy the type of house that i've always wanted. so the plan is to over pay to get it down to a level that the mortgage is a smallish percentage of our income.

i don't overpay directly but stick into a savings account and always take my full ISA allowance for me and my partner out of that because i feel we get better returns out of stocks than repaying the mortgage.

so for me over paying is good because i want to reduce the amount of mortgage i have outstanding (it's a large amount but low LTV).

Harry_Powell

Ah, that makes sense too - I'll add that to my 'LTV' scenario.

Harry_Powell

Joeskeppi wrote: »

Mine allows 10% but apparently I can't just increase the monthly amount, I have to go into the branch and do it, seems silly.

Out of interest, can you get back your overpayments if you need them for any reason (or take a payment holiday)?

System

Harry_Powell wrote: »

Out of interest, can you get back your overpayments if you need them for any reason (or take a payment holiday)?

Honestly have no idea.

I haven't made any during my current deal (6 months in), paid £6k off when I took it to get a better rate and now saving for a wedding instead.

chucky

Harry_Powell wrote: »

Out of interest, can you get back your overpayments if you need them for any reason (or take a payment holiday)?

i can't take back overpayments unless i pay a fee for the privilege... but i can take a payment holiday but it has to be after a certain number of repayments i believe.

my personal preference... if i could have got a cheap one was an offset mortgage that way you control overpayments.as you don't need to make them and have them offsetting interest against your mortgage. if you have to pay 40% tax on your savings it's a very good option.

when i was looking they weren't cheap...

Harry_Powell

yes, I saw an article that said higher rate tax payers would have to have £10k invested in the offset in order for it to pay its way.

The disadvantage of an offset is that while it is a tax free savings account, eventually the mortgage will be paid off and you'll have to find somewhere else to put those savings, but you'll have missed out on years of ISA allowances.

Now that you can put £5k in a cash ISA and £10k in an S&S ISA, I'd imagine that offsets would go into decline.

chucky

Harry_Powell wrote: »

yes, I saw an article that said higher rate tax payers would have to have £10k invested in the offset in order for it to pay its way.

The disadvantage of an offset is that while it is a tax free savings account, eventually the mortgage will be paid off and you'll have to find somewhere else to put those savings, but you'll have missed out on years of ISA allowances.

Now that you can put £5k in a cash ISA and £10k in an S&S ISA, I'd imagine that offsets would go into decline.

the flexibility of a temporary place for my cash of the offset was what was more attractive as well as the tax efficiency.

as you already know the benefits of an ISA being a tax free wrapper for your investments cannot be over-emphasised enough especially with the dividend re-investment. i'm using mine as where i will be drawing part of my cash for retirement instead of taking a lump sum from my pension pot.