OffSet Mortgage

mmdpkaaa

Hope u guys can help. Im moving to london in October to go back to university as a postgrad student. I will have savings of around £170k. Im looking to purchase an apartment for around £130k. Would an offset mortgage work well for me as i'd like access to my saving and will have to pay for living expenses, tuition fees etc for the next 3 years. I'll be looking to work maybe part time (particularly in my 3rd year) to help fund it.
Or would i be better off putting down a deposit and getting a conventional mortgage?

Thanks

dimbo61

Have you got your figures right ?
£170K in savings ( well done) and hoping to buy an apartment in london for £130K ( good luck)

mmdpkaaa

yep east london - there are plenty of places available around that budget - east ham/upton park/barking etc... etc

getmore4less

what income will you have?

That will be the limiting factor on how much you can borrow

mmdpkaaa

no income for the next two years but getting a mortgage will not be an issue. i can show accounts from last couple of years earning £100k++

ViolaLass

I would have thought £40k would be amply for living expenses for three years with no rent/mortgage to pay.

mmdpkaaa

i agree, but is it worth going for the offset just so if cash is needed i have access to it?

jamesd

Yes, it's worth considering an offset account. The catch is that offset mortgages normally have a slightly higher interest rate than non-offset mortgages. This means that there's a minimum amount you need to have in the offset account before it breaks even. How much depends on the rate difference.

getmore4less

jamesd wrote: »

Yes, it's worth considering an offset account. The catch is that offset mortgages normally have a slightly higher interest rate than non-offset mortgages. This means that there's a minimum amount you need to have in the offset account before it breaks even. How much depends on the rate difference.

And net savings rate.

The diferences in rates are quite low these days FD has typicaly been around 0.2%

I still think income = 0 is going to be a potential issue.

Thrugelmir

getmore4less wrote: »

I still think income = 0 is going to be a potential issue.

More than a potential issue.