Britannia Offset with no savings?

thermos

Hi,
I am remortgaging for first time with Britannia from Halifax, £138000 mortgage and house valued at £235000 have gone through the whole process and just signing the final agreement docs. Trouble is I'm torn between going for their offset lifetime tracker (2.69 above base) and 10 year fix at 4.79 which I originally wanted to go for. Not because of the eternal question of when will base rates rise or even fall , but because I am considering an offset when I have no savings -but would have to and would like to gradually build some up.
I am 34,and also perhaps questioning if it is right to fix for so long. I feel certain I would never want to move , and I agree with the idea of long term fixes in principle which are much more common elsewhere .
Does anyone think it is a bit ambitious or pointless going for an offset starting with no savings although obviously I would need to build this up starting from scratch and would like to build up savings? Has anyone else done this?I like the idea of an offset and am new to the idea and have never given them any thought until now . Like the idea of a sensible long term fix but the exit fees would be horrendous.
The Key Facts mentions the offset is interest only which doesn't appeal to me. Does anyone have experience of Britannia's offset, can they be on repayment? Also how many accounts can be linked to my offset , could I link my Halifax current account to it or do I have to move everything over to Britannia.
I've never been attracted to short term deals.First time remortgaging so any thoughts or opinions would be appreciated if only to aid me in making a choice while I mull over it this weekend

Perelandra

thermos wrote: »

Hi,
I am 34,and also perhaps questioning if it is right to fix for so long. I feel certain I would never want to move , and I agree with the idea of long term fixes in principle which are much more common elsewhere .

As you've said, it's a gamble to fix as you never know what will happen qith regards to interest rates. From a costs point of view, if in two years time base rate went up by 2% for the remaining 8 years, this fix would work out cheaper than the tracker, all other things being equal. If your situation is stable, and you see no reason to move, long term fixes can make a lot of sense (and 4.69% doesn't feel excessive for a long term fix).

thermos wrote: »

Does anyone think it is a bit ambitious or pointless going for an offset starting with no savings although obviously I would need to build this up starting from scratch and would like to build up savings? Has anyone else done this?I like the idea of an offset and am new to the idea and have never given them any thought until now .

This probably depends on the rate of "building up" that you will be able to afford it do, whether you may want easy access to the savings, and how financially disciplined you are.

thermos wrote: »

Like the idea of a sensible long term fix but the exit fees would be horrendous.

Does the mortgage allow protability to another property without penalty charges, *if* you do find that you need to move?

thermos wrote: »

The Key Facts mentions the offset is interest only which doesn't appeal to me. Does anyone have experience of Britannia's offset, can they be on repayment?

Britannia will allow capital repayments on their offsets, but not (I believe) not a regular monthly repayment offset mortgage.

thermos wrote: »

Also how many accounts can be linked to my offset , could I link my Halifax current account to it or do I have to move everything over to Britannia.
I've never been attracted to short term deals.First time remortgaging so any thoughts or opinions would be appreciated while I mull over it this weekend

Almost certainly only accounts you have with Britannia could be linked.

getmore4less

Interest only is not relevent as long as you put aside the equivilent to a repayment.

fixing or 10 years what if you want/need to move and end up with penalties?

Do a what if based on paying the same as the fix into the offset and see how much you save.

then play with the varialble interest rate to see what changes make.

remebber overpaying can have a significant impact(reducing) on the future costs and means you can take higher rates and still not be worse off.

Joe_Bloggs

You can turn an interest only offset into a virtual repayment mortgage.
Do this by paying in to your offset accounts the amount of capital repayment per month that would clear the mortgage over the term .

Lets say the term is 20 years (240 month) at 3.19% then the initial interest is 366.85. The equivalent initial capital element repayment would be 411.69. Aim to maintain a sum total of 778.54 for interest and capital repayment as if it was a repayment mortgage.

Because you offset the 411 next months interest will be 9 pence less so you can afford to add to your offset account monthly repayment, by nine pence (412.78).

If you have more money than this to save then you can offset that too as it will reduce the total interest charged. The trick is not to deceive yourself into thinking you can withdraw all this money without trashing your mortgage repayment strategy. You must leave in those capital repayments.

J_B.

thermos

Thanks guys , this is exactly what I needed , some objective questions to ask myself and Britannia and how to look at an offset. Just called Britannia to double check some things and get another offer printed out for the offset and turns out it's a better deal than I thought 2.39% above base rate rather than 2.69 as they have given me the old deal as I applied a month ago before they upped the rate , Thanks again!