Offset mortgage should I pay off some capital?

sarahbella

Hi guys
We've just set up an offset mortgage with the Woolwich and plan to be mortgage free in 4-5 years.
We have offset 45k (8k of this needs to remain in savings as it's on loan from a family member) on a 71000 mortgage.
Is there any benefit to paying off some of the capital now - apart from feeling great about having a smaller mortgage?
Thanks
Sarah

Fruitcake

I plan to pay off a chunk of my offset mortgage in April partly for the euphoria of owing less, and partly because I can cancel a life insurance policy that is linked to the mortgage. The monthly savings on not paying the life policy are more than I can make investing the chunk of money I will be receiving from an endowment payout.
Incidentally, are you using your credit card for all possible purchases and then paying it off each month? By doing this istead of using debit card, cash or cheque you will be offsetting more money for longer. In addition you will be stoozing more.

Fruitcake

You Only Listen To Me When I'm Wrong

TallGirl

I too have a mortgage from the Woolwich, £48,000 due to be paid off in 5 years. I am overpaying as much as I can and then building up my savings. I am sure I have seen on here various calculations if it is worth paying off the capital so do a search and you should find them.

MortgagesInc

If you're looking to keep your mortgage payment at the same level, and repay your mortgage as quickly as possible then there's no real benefit to repaying a lump sum. The only advantage is that you can reclaculate your monthly payment, therefore reducing your actual commitment month on month

andrewmoorcroft

Clearly not every replyer understands offset mortgages to have given inappropriate replies!
There is no financial benefit in part paying off the capital. YThe money that you pay interest on will still be the same ie; loan - savings. Whilst you owe money you might aswell allow your savings to build up till it equals your borrowings.