Advice on a Mortgage with a Cash Reserve

platespinner

Hi All,

Hoping for advice on raising £30k.
Currently have £97k lifetime tracker with Woolwich. There is a reserve facility on this product but its only £4500 and I need £30000 to fund buying a fixer-upper and selling it on in 6 month's time.
My financial advisor is telling me to remortgage with the Woolwich again to an offset mortgage but the rate would be .3% higher than I'm currently paying and there are about £1000 worth of fees involved. This sounds like a silly idea to me.
Any advice?

Many thanks,



Platespinner

apk1

You could simply increase your reserve with Woolwich which will cost £150, but the rate will be at SVR - 7.25%, this would allow you to drawdown as and when - as would the offset but the offset would be all at the same rate.
Or you could take a further advance on a deal again £150, should you change to offset then the fees sound high, I think your adviser is putting you onto a lower rate but higher fee package, depending how much of the funds you anticipate using depends if this is worth it, possibly look at other offset deals ?

platespinner

apk1 wrote: »

You could simply increase your reserve with Woolwich which will cost £150, but the rate will be at SVR - 7.25%, this would allow you to drawdown as and when - as would the offset but the offset would be all at the same rate.
Or you could take a further advance on a deal again £150, should you change to offset then the fees sound high, I think your adviser is putting you onto a lower rate but higher fee package, depending how much of the funds you anticipate using depends if this is worth it, possibly look at other offset deals ?

Thanks for the reply apk1. I like the idea of increasing the reserve- the IFA did not mention this could be done for £150. The rate she was trying to put us on was actually higher and i wouldn't anticipate needing the £30k for long, so ot would make sense tokeep the mortgage rate low.
Unfortunately here in Northern Ireland we are limited to only 2 offset mortgages, Woolwich or Standard Life (at least that's what the IFA says) so there's not much competition.