To OP or not

rumncoke

We have an offset mortgage with NatWest on 3.75%, 17 years remaining. Originally taken over 20 years due to not selling old house before moving-now sold so current balance £34500. Fully offset & other savings, so not paying any interest. Monthly minimum payments £250. (currently paying £322 by DD-last changed it when we sold the other house nearly 2 years ago)

Until 6 months ago I was OP around £1800 a month & had hoped to be MF by early 2012. However due to DH's health & the likelihood that he will not return to work any time soon I stopped OP & put the extra money into savings. He is now on half pay & it is likely that over the next couple of months he will be negotiating a pay off.

My original thought was any money from Quidco/Ebay etc (not a vast amount but it all helps) I would transfer to mortgage, but now wondering if I should just add to savings, as effectively we are getting 3.75% interest on the money in the offset accounts. (ie we are not paying 3.75% on the money outstanding) Please correct me if I am wrong here.

I have always seen the mortgage as a debt to be rid off asap but now wondering whether to amend DD to minimum or whether to just plug away at balance with small amounts each month. No real concerns about affording necessary outgoings as I work - self employed & I will probably look for a part time job in the future or DH will if health permits.

Any thoughts appreciated, thanks

LilacPixie

if you saving rate is less than the mortgage rate i would shove the savings into your offset account.

In your position i would offset what I could and add to that pot with a view to reducing outgoings as low as possible for your DH's likely ill health retirment even if that retirment will be a temporary thing..

rumncoke

Thanks, we are already fully offset, so no real benefit to adding to the offset accounts. Anything over the mortgage balance earns a measly 0.1% Rates are better on our other accounts. Over the last few months I have been looking at reducing our general spending. (Did not really have to think about it previously-doing a spending diary was a real eye opener!) Thanks to finding this site when we had the 2 houses I already shop around for utilities/insurance etc.