Does this seem sensible?

qualer86

Thanks for that. I'm hoping rates aren't going to shoot up that dramatically but I guess you never know.

I'll definitely ask all the questions of our advisor later though.

magpiecottage

2.4 × joint income. That would have been within lending limits in the late 1980s when interest rates were around 15%!

So it looks very affordable and probably worth taking a chance.


Offset mortgages can be a little more expensive but, at the same time, the interest saved by offsetting is equivalent to a higher rate than you would get by putting it on deposit - and of course it is tax free.

qualer86

Okay so I found an offset mortgage which seems good value. Still struggling to get my head round it.

It's a 5 year fix at 3.69% then variable of 4.99%.
Product fee of £495
Max LTV 75%

So I would put down 32k. Mortgage of 93k. Offset 16k. So in order to work out my monthly repayments would I plumb in 77k at 3.69 into a mortgage calculator?

Also the mortgage is with YBS. What are they like to deal with?

dimbo61

They also do a 5 year offset fixed at 3.49% fee £995!
I like YBS and have been a customer for 7 years but my wife had a offset mortgage with YBS before we met.
We deal with the local branch in our town and they have good customer service in YORKSHIRE when we need to ring them.
Use " whatsthecost" to work out which is the best deal for you.
For example it would cost £475 at 3.49% over 25 years ( £95K)
while it would cost £485 at 3.69% over 25 years ( £95K)
So very little in it as you would have less to put in the offset account after paying the fee,
I have not taken into account any savings you MIGHT be able to save in the offset account.
With £16K in the offset more of your mortgage payment would go towards the capital repayment and less towards the interest

qualer86

Our advisor recommended another building society's offset mortgage with a rate of 3.68 over 2 years with fees of 499.

Seems to me YBS would be a better option as they offer 3.24 over 2 years with 495 fees and they allow 99.9% overpayments?!

Unless I'm missing something obvious that is. I've emailed our broker the deal anyway to see what he says about it.

dimbo61

YBS deal direct with borrowers so your broker would not get any commission!!
We had a 5 year fixed offset with YBS and for the first 3 years were very happy then BOE base rate dropped to 0.5% and we felt we were paying too much BUT with the offset and overpayments we still saved thousands in interest and we wanted the security.
If you go for a fix look at 5 years not 2 as you will have paid very little off the mortgage debt.
60% LTV in 5 years