long term fix or offset re-mortgage??

mickys_2

Hi there,
1st time caller(as they say).I'm in a fix as I try to decided between going for a 10yr fix with Woolwich at 4.98% and an offset mortgage(nothing specific at the mo).Time is of the esscence as intrest rates are prob about to go up and the fix rate cut be pulled.
I've only just looked into the details of an offset and it strikes me that my savings/salary are going to work better for me this way than earning interest which is then taxed.Interest and term time savings seem to be plenty when more money is sat in the current/savings accounts.We are not on the edge when it comes to the monthly payment but then again we haven't that much surplus to play with.The problem with this is that we are at the mercy of the interest rate where as the fix has more surety.
The prob with the fix is that it is a long term comittment and is expensive to get out of,6% for the whole term.But then again with rates about to go up and that seems to be the trend short term, is it a good rate to secure?My thoughts are that rates(variables) have a fair way to fall before we are out of pocket.Any ideas/advice please.

chun831

In the same position and just found a long term fixed rate with First Direct - not sure if it is still around but I have just got 5.19% for 10 years. The good thing about First Direct is that it is TOTALLY flexible AND offset as well. In essence we put all of our savings into the First Direct Savings account and earn no interest but offset against loan. Upon opening the account I checked to see how much I needed to pay off each month to repay capital and interest (and then pay a bit more). The set up fees were a bit more than most but FIXED for 10 years really appeals to me. My aim is to pay this 20 yr mortgage off within the 10 yr period. I also think the rates will rise!

mikeywills

You can get fixed rate offset mortgages, we have one with the Norwich and Peterborough, we took ours out in March which was fixed for 5 years at 4.89%. Look at offsets in a bit more detail, you might be surprised on the choice.

mbailey

Offsets tend to be higher interest rates than non-offset accounts, so unless you have alot of cash sitting around might not actually work out to be better.

Alot of standard mortages allow you to over pay (say 10% per year) and then take payment holidays if you have paid surplus into the account. This is obviously not as flexible as a proper offset account, but possible good enough.

Fruitcake

If you decide to go with an offset mortgage, use your credit card at every opportunity instead of cash, debit card or checque. That way your monthly outgoings continue to offset until the cc bill arrives. Pay off the cc in full each month or it doesn't work. The other advantage to this is you can stooze to the maximum at the same time.

Fruitcake

You Only Listen To Me When I'm Wrong