offset mortgages - good if house prices crash?

ds1980

If there was a house price crash which should inevitavbly run concurrently with increased interest rates, would it be best to have an offset mortage to allow for the increased payments?
ADVICE PLEASE

toonfish

what you owe is what you owe, regardless of the "type" of mortgage. Offset is really for folk who have a fair bit of cash on deposit - if you're concerned about rate rises a fixed rate would be better.

Mr_helpful

Most mortgages these days allow for some overpayments often its 10% per annum. As toonfish says for offset to work you need savings. House prices are largely dictated by demand and interest rates by inflation in the economy not just house inflation. I think money will have to tighten up quite a bit before prices fall by any significant amount.

ds1980

Thanks guys, Im not concerned about house prices just trying to prepare myself for whats best. Will have a bout £75k to put into our new house hopefully by june/july and was thinking of offset with this deposit. Will probably be buying for £300000ish? most of my mortgages are fixed anyway as we have quite a few btl's. My other view would to be invest the 75K and keep buying homes with 5%.

Just interested.

cheers

apk1

Offset's only really make sense if you have a fair bit of cash, generally speaking you need to have about 10-15% of the mortgage in cash on average, if not you will probably be better off with a lower rate deal, as offset's tend to have higher rates.

As to how much deposit you put down thats up to you, how much of an income stretch is it ? if rates went up would you struggle ?

ds1980

not really we have 6 houses, most are self funding and we make really good returns. All are easily rentable and we arn't stretched at present. We have about £150k+ in equity. The £75k would be about 30-40% of the new house I hope to buy in the summer. Think it would be wise to invest it into our own home but we move so often i sometimes think its not worth it!

What would your advice be?

thanks for your time

apk1

The amount of deposit is not really an advice issue, more a matter of choice, if your income is secure and "plenty" then you may feel it wise to "invest" your equity into other rental properties, if not then you may wish to place a larger deposit to protect yourself should the market move against you in any way.

absolutebounder

"I am an Independant Mortgage Adviser"
Always worrying when someone is so careless about spelling their title. Like maybe, they are that careless with their advice, I wonder?

ds1980

a little out of line.

i didnt ask for literacy advice did i!

"Like maybe" is this ghetto or just that you are stupid?

absolutebounder

ds1980 wrote: »

a little out of line.

i didnt ask for literacy advice did i!

No. but I saved you from loads of other people wondering what sort of person cant spell his occupation and thinking god you cant be any good making basic mistakes like that. You should have thanked me really but not everyone has manners.

Like maybe is possibly an Americanism and possibly not. I included it in the sentence deliberately but you probably dont know why and as I am not going to tell you remain ignorant dont you?

Suffice it to say when it comes to use of language I am way ahead of you.

ds1980

absolutebounder wrote: »

No. but I saved you from loads of other people wondering what sort of person cant spell his occupation and thinking god you cant be any good making basic mistakes like that. You should have thanked me really but not everyone has manners.

Like maybe is possibly an Americanism and possibly not. I included it in the sentence deliberately but you probably dont know why and as I am not going to tell you remain ignorant dont you?

Suffice it to say when it comes to use of language I am way ahead of you.

No. But (never start a sentence with but)

from loads (from lots of)

sort of (kind of) cant (can not)

as i am not going to tell you remain ignorant do not? you??

Suffice it to say (Suffice to say)

to use (to the use of)

Christ my little red marker is working overtime!

I think all you needed to answer was stupid.....well done D- (must try harder)