Co-op mortgage - help please

f1-fan_2

I have just agreed a price on a house. I had a mortgage in principle with Natwest (at 3.19% for 2 years) for 85k but after finding out about offset mortgages I think these would suit me better.

Looking at First Direct, I could get an Offset Base Rate tracker at 1.99% above base for £999.

I am interested in this, but I heard good things about Co-op so rung them to ask what their offset was like. They said they didn't do offset mortgages, but their lifetime tracker with overpayment fund was "about the same thing"

Has anyone any experience of this product? The Co-op is 1.99% above base, with no ERC, unlimited overpayments and no fee. You do need a Co-op current account to get the deal, so I am in the process of applying for this.

In Co-ops words, interest is calculated daily and if have a 100k mortgage and 10k in the overpayment fund, you only pay interest on 90k. This seems identical to an Offset mortgage which is what I want - BUT, have I missed anything?!

Getting a bit confused.

itsgazza_2

Sounds right BUT I think they have a limit on how much you can put into an overpayment fund (10% a year). If you overpay more than this there are Financial Penalties

f1-fan_2

Thanks, but I do think as there is no ERC charges, you can pay any amount at any time? Interest is worked out daily.

I need 62.5k to buy the house which needs a fair bit of work. I'm looking at getting an 85k mortgage. I'll immediately put 22.5k into overpayment fund and will have access to that money later if and when I need some or all of it for renovation.

Anyone with a Co-op mortgage that can confirm what I'm doing will be ok?

Thanks.

Person_one

I had a co-op 5 year capped tracker and put the allowed 10% into the overpayment fund straightaway. When I split with the ex and requested it back it only took a day or two. There was a limit as ERC applied for the first 5 years when the cap was in place.

I think what you're planning should be fine but don't take the word of strangers on here! Why don't you just ring the co-op mortgage number or speak to a mortgage advisor in branch and be 100% sure?

f1-fan_2

Thanks for your reply. I have spoken a couple of times to the co-op on the phone, but they don't arrange mortgages in the bank anymore, so I can't visit to discuss, which is why it's taking a time to find out all the answers.

Sounds like the mortgage is like an Offset and what I want.

llydaw

I too am with the Co-op. Was on a tracker that has now come to an end and have moved onto the 5 year fixed rate. As the poster above has mentioned, the overpayments you make are paid into the overpayment pot and it then reduced the interest paid on the capital. You can however withdraw this money at any time, should you need to. If you intend to make overpayments the maximum you can make is 10% per annum (or it was in my case) and they will automatically reduce your monthly repayments unless you ask them not to. Hope this is of some help. Co-op have been really helpful when I've made overapyments and I've been very happy with them as a mortgage provider. Good customer service.

LillythePink

We have just taken out one of these.

There are no maximums in the overpayments and they actually sit in another account so if you need your overpayment money back to say replace a roof etc then you can get it back and you don't have to take out another bond or secured loan.

They also have a payment holiday and interest only months providing that the amount you owe doesn't go above your mortgage amount.

I think that it's a good product and although there were slightly cheaper deals out there - for us it was the best one

And no - don't work for them!

sundin13

We have the co-op's 5 year capped tracker deal and it is definitely a max 10% of outstanding balance per year into the overpayment fund.



As others have said, the benefits are that you can get it out at any time, and the customer service (whenever I've needed it) is excellent.