Isa included in Offset arrangement

cslogg

I have an Offset Mortgage with Barclays.
In one of my savings pots I have £8000 .
If I convert £5100 of this into a Barclays Golden Isa it will earn 3.1% interest as well as being included in the offset arrangement.
This seems such an obvious thing to do it makes me wonder If I am missing something?

cslogg

getmore4less

Anything included in the offset pool earns 0% interest.

Whats your mortgage rate?

We use the ISA then offset once the rate drops below the mortgage.

cslogg

My mortgage rate is 1.25 and it is an endowment.

cslogg

getmore4less

Take the Barclays ISA for convenience or a better one the interest is better than the mortgage

Also get a monthly saver each these also make more money even after the tax.

cslogg

Its not just convenience.
If I take a Barclays Isa I get 3.1% interest from that and get the benefit of it being offset against my mortgage.If I get an Isa elsewhere,I may get a slightly better deal but lose out on the offset side of things.

cslogg

getmore4less

cslogg wrote: »

Its not just convenience.
If I take a Barclays Isa I get 3.1% interest from that and get the benefit of it being offset against my mortgage.If I get an Isa elsewhere,I may get a slightly better deal but lose out on the offset side of things.

cslogg

NO YOU DON'T

If you include the ISA in the offset pool the interest is ZERO on the ISA.
(if they did pay any interest it would be in error not seen any on our offset ISA so far)

cslogg

I am not at home at the moment so cannot check ,but I had a Golden Isa last year and off the top of my head I seem to remember I earned just under a £100 from it.It was included in my offset arrangement.

getmore4less

OK if thats the case I am too late for this year, my ISA has gone elsewhere

ERICS_MUM

Usually where an account balance is part of a mortgage offset it does not earn interest itself. This is because the money is used to reduce the interest on the mortgage. The money can't/shouldn't be used for both !