Sanity Check On Offset Mortgage

dacdac

I am currently on SVR with NRAM after my fixed deal came to an end last year.
I currently have a mortgage of £95K against a property valued at least £420k
The family are growing fast and I need to extend or move in the next 12 - 18months so I am looking at extending my Mortgage to £170k.
At work things are not great and could end up being made redundant or leaving for a better job/self employed in the next 6 months.
My current thoughts are that I should re-mortgage with an offset tracker now for £170k and then keep the surplus £75k in an offset account until I need the funds.
The benefits are :-

1. Get the Mortgage now will be easier as I have good service and salary with my current job.
2. Having £75k in offset account/s will add some comfort if I get made redundant and have a delay in finding a job / set up business .
3. When things settle down on the job front I have the funds available for the extension.

I realise that I can get a better rate If I don't offset but for the flexibility that it brings I am very tempted.

Have I missed anything or is this a sensible approach?

Thanks

Wh05apk

If you move, you will need to apply for a new mortgage which will based on your circumstances at the time.

As you say if you increase the mortgage now, and offset it wont cost you anything, but you will have the funds available for extensions/living costs if you lose your job.

dacdac

Thanks,

The mortgage that I am considering has a porting facility, does that normally mean that you have to prove income again at time of purchase if the price is inline with current mortgage Ie I don't extend mortgage?

Staying put is the favourite option at the moment but plans can change.

Wh05apk

Being portable means you can port the deal, you will have to re-apply/qualify for the mortgage at the time.

dimbo61

This OS not a good idea as the nice benefits people will want you to live on your £75K savings in the offset account if you lose your job !

getmore4less

dimbo61 wrote: »

This OS not a good idea as the nice benefits people will want you to live on your £75K savings in the offset account if you lose your job !

Get the mortgage with Barclays and you can avoid that issue they conveniently allow you to arrange it as an authorised overdraft.

As you can with other lenders like the One Account