Should I leave this money in offset account?

cslogg

I have an offset mortgage account with the Woolwich.
At the moment it has 7 years to run on a £40,000 mortgage.I also have £8,000 in a savings pot.I am about to recieve a further £10,000.My question is,should I put this amount into my saving pot and leave it there or is there a better way to make it work for me?

cslogg

mikeywills

What is your current mortgage rate? this will have a bearing on what you do

There are a number of savings schemes that might be higher, Alliance and Leicester offer one at 12% for 12 months only, but I think there is a limit to how much you can put into it. Check out the savings options, Isa's and see how they compare with your existing mortgage rate.

If you do not need the money for easy access look at other avenues, but if you might want to dip into in it in the near future put into the offset.

MORTGAGESTALLION

The A&L deal I think is a Regular Saver account that you pay a maximum of £250 per month into for one year - not the account for a lump sum. You also need to open an A&L current account. With an cash ISA you can only put in a maximum of £3,000 per annum.

£18,000 savings to £40,000 mortgage is a good ratio on an offset account and should ensure that you pay your mortgage off well before eight years if you keep your mortgage payments at the normal level. Just have a quick look and see if you can get a better deal than the Woolwich - you should be paying no more than Bank of England base + about 0.75% (5.50% at the moment).

Supernova

The A&L works out at about 6.25 gross or something like that with the minimum monthly commitment to the c/a of £500. Plus it ties up £6000 for the year.

Bernie

...and transfer money from your offset deposit account to your offset ISA each year.

This will make no difference to your offset situation - but when you are able to "release" the ISA from the offset sometime in the future, you will come out of the situation with all your cash in a tax-free account.

My wife and I are doing this with IF where we have our mortgage completely offset with funds in ISA, TOISA, deposit and current accounts.

We will open ISAs elsewhere next year if we have the surplus cash to do so. If we do not have the cash to invest outside IF, we will move cash internally from our IF deposit account to our IF ISAs.

As we pay down the capital on the mortgage, we intend to transfer the ISAs from IF as soon as we can "release" them from being needed as an offset.

If nothing else, we will, over the years, move money into ISAs.

:beer: