FTB looking at flexi offset via employer - advice?

ses6jwg

Hello all.

I am currently renting from my parents a mid terrace 2 bedroom house. They have told me that if I can secure a mortgage they are happy to sell the house to me at what they bought it for as they have taken rental income from it over the past 5 years and are happy to help me get onto the mortgage ladder.

I work a major high street bank, however although I know "the basics" of mortgages, I am by no means an expert.

As a staff member, I am entitled to the staff mortgage deal.

I am just after some opinions as to whether it is any good - I have checked and it is suitable for FTBs.

It is a Flexible Offset Mortgage.

85% LTV (I can manage a 15% deposit I would have to sell most of my non-ISA shares and dip into some tax-free savings, on this property we are talking about 15-20k deposit).

2.99% currently as it tracks 2.49% above base rate. Overall cost for comparison is 3.6% APR.

No booking fee. Free valuation and £250 cashback on completion.

I was a bit concerned with the tracking element, however as it is flexible offset and your repayment is linked to the amount you have in the linked savings account, this seems quite attractive as I am a good saver and do quite well in the markets so can see me building this up.

Anyone with any opinions/ advice?

opinions4u

Benefit in kind tax.

I think the official HMRC rate is 4%, so they will tax you on the value of the difference between 4% and 2.99% at whatever your highest rate of tax is.

e.g. £85k x (4% - 3%) = £850 x 20% = £170 tax a year.

getmore4less

Check the conditions of the loan if you leave the bank.