Santander Offset Mortgage - FSA protection?

Senior_Paper_Monitor

Dimbo,

three possible answers (there are a few more) .....

1) many such mortgages are written on a repayment basis (so the avilable reborrowing in ever reducing)

2) the 'wheeler dealers' of this world are doing deals when the opportunity arises i.e temporarily using the collateral of their main asset (their home) to, for instance, buy a property cheap when it arises, renovate and sell on. For these 'players' the flexibility of 'in and out financing' without re-applying is ideal - and much cheaper than the bridging or other alternatives. £85K is not acutually a lot of money for this sort of client.

3) Where the borrower receives a large percentage of income on a few occasions a year (annual bonuses, commissions - high value capital goods salesmen for example, specific deals - development builders etc) and then lives off it for an extended period the offset is a cost effective solution.

- I am still confident that the Santander offset structure is prtects the deposits by way of the greater borrowings (but await the 'letter of comfort' from them - due by the end of this week).

The_J

dimbo61 wrote: »

I have an offset mortgage and love the flexability that it offers but I cant help wondering why anyone would need to have over £85,000 in an offset account and a Hugh mortgage.
Why not pay off some of the mortgage now and bring your savings down to less than £85,000.
No one needs more than £85K Just in case and the mortgage needs to be paid off sooner or later

£85,000 is a paltry amount of money.

Having money in the offset account is exactly the same as overpaying on the mortgage but gives you additional flexibility.