Stoozing a Mortgage

peekay45675

Has any one stoozed a mortgage before. I have a flexible mortgage, can overpay as much as I want and draw down when needed. I noticed on my statement that it said that interest is calculated on the closing balance for the account as at the end of the previous month.

I will hopefully be in the position to pay off my mortgage but not sure that I should for the following reason

. For example - if on the last day of the month I pay off all my mortgage except say £10, then to a layman it would appear that interest would only be charged on that £10. On the first of the next month I could withdraw all the morgage as its a flexible mortgage leaving only £10 in the mortgage account and the balance to be put in the best instant access account I can find. Thus gaining interest on the transfered sum. At the end of the month the process starts again.

I would love to do this to A and L as they have been one of the clowns who have refused to reduce the SVR to a reasonable level.

Cheers

jamesd

Provided the terms of the mortgage allow it what you're contemplating is fine. You may have difficulty getting a higher after tax interest rate than your mortgage interest rate.

Degenerate

jamesd wrote: »

Provided the terms of the mortgage allow it what you're contemplating is fine. You may have difficulty getting a higher after tax interest rate than your mortgage interest rate.

You're missing the point. They'd only be paying interest on a tenner.

Peekay, I'd go through you T&Cs with a fine toothed comb before attempting this, it's likely they have getout clauses. If they really have left a loophole it may be worth a try, but you'll probably come up against a lot of problems with fraud alerts when carrying out so many high value transactions back and forth.

stevemcol

I stoozed my mortgage with no problems (Virgin OneAccount). At one point I had 30 grand or so of it on credit cards. More or less halved my interest payments. It was a good few years ago; I got bored with Stoozing when the CC companies all started introducing BT fees.
You might need a super BT card to get the funds paid into your mortgage.

jamesd

Degenerate, hmm, you're right, I'd read it as a way that would actually work, unlike what is described.

peekay45675, you'll find that accounts that offer this facility use daily interest calculation, so you'll be charged interest on the mortgage balance for each day that the money is on deposit somewhere else, plus the time it takes for the money to be moved between places. So it would just cost you more money.

What you can do is find a savings account that pays a higher rate of interest after tax than the mortgage. If you can.

getmore4less

peekay45675 wrote: »

Has any one stoozed a mortgage before. I have a flexible mortgage, can overpay as much as I want and draw down when needed. I noticed on my statement that it said that interest is calculated on the closing balance for the account as at the end of the previous month.

I would check that very carefully, it might be that the payment is calculated that way but the interest is on daily balance.

What is the mechanism for drawdown?

lisyloo

I think you'll find it's calculated daily too.

I stooze my mortgage as I'm paying 0.99%.
Some of it's in cash ISAs getting 3% right now.
Some if it's in NSI index linkde savings certs at RPI+1% (about 4.6% oright now?).
Some in Stock & shares which I understand is a gamble but one I'm prepared to take at 0.99%.

What is the mechanism for drawdown?

Mine is a fast payment to my bank account i.e. instant.

sveika

lisyloo wrote: »

I stooze my mortgage as I'm paying 0.99%.

Really really amazed - how could you manage to get a mortgage at 0.99%? Wow!!

bromie21

stevemcol wrote: »

I stoozed my mortgage with no problems (Virgin OneAccount). At one point I had 30 grand or so of it on credit cards. More or less halved my interest payments. It was a good few years ago; I got bored with Stoozing when the CC companies all started introducing BT fees.
You might need a super BT card to get the funds paid into your mortgage.

do you mind me asking - how much do you reckon you made through stoozing in year,at your peak?
Trying to work out how worthwhile it might be

stevemcol

bromie21 wrote: »

do you mind me asking - how much do you reckon you made through stoozing in year,at your peak?
Trying to work out how worthwhile it might be

OK, it was a few years ago so interest rates were higher. It included free balance transfers and I was a casual stoozer unlike some other on this board. That said, over a typical 12 months I would say £1000 profit. It was definitely worth while.

I then switched to ICICI for my stooze pot, accepting a smaller profit. The reason was psycological really. I just didn't like blurring my mortagage balance with Stooze funds.

(I don't like the word Stoozing either but it's named after the first guy who decided to tell everyone else he was doing it!)

These days, I just think the profits from Stoozing a too small compared to the effort required. Others will differ, mainly becuase they're less lazy than me!

lisyloo

Really really amazed - how could you manage to get a mortgage at 0.99%? Wow!!

Hi - I got this in late 2008. It's BOE+0.49
The margin that banks now charge over BOE rate has now gone up a lot since the banking crisis so that would be impossible now.

I initially signed up for a 10 year fix at 5.99% in about June 2008, but as rates dropped I switched before the mortgage completed. I have been very lucky.
We are now saving/investing as much capital as we practically can towards the debt without being overly frugal but not physically paying it down as that doesn't make much sense.

I'm currently in the process of switching some cash ISA money to S&S ISA because savings rates are below inflation.
I keep it under constant review.
That's a bit of a gamble, but there are risks in being too safe and at the moment that risk is that your savings actually depreciate in real terms.

I didn't realise at first but it's an important point that being "safe" is actually a risk in some ways if you see what I mean. It's just an inflation risk as opposed to a capital risk.
The most important thing is balance, so I have some money in property, shares, cash & NSI.