Mortgage Free in Three Yrs

Desperate_Housewife_2-2

justmeklg wrote: »

my current mortgage deal ends in july and ive been looking at the virgin one deal where they give you your mortgage your salary and savingings all go together to reduce the interest therefore, as per thread, paying of your mortgage sooner.. has anyone got this account, its it what it says on he tin? worth doing? any responses greatly appreciated (this is my first post ive been a member of the site for ages but not the threads) thanks Kath

I have a virginone account but I wouldn't just recommend it to anyone.

Firstly RBS has had bad press with the Goodwin pension debacle and they havene't passed on the last interest rate cut either. There are lots of people on this forum that are angry at RBS for various reasons particularly the one account.

Secondly, its not for everyone, its been great for us because I borrowed loads of money via credit cards on 0% balance transfers and saved a fortune in interest but it seems to be slim pickings these days due to the credit crunch.

I say look seriously and take advice before you go for it, its got its good points ie you can access large sums of money without applying for more loans if you have a good facility and if you have a lot of savings they offset your amount owed so reducing the interest you pay monthly.

Its a product that needs to be managed and fully understood before taking it out. Good luck!

catshark88

If you are after an offset mortgage, we have found that the Woolwich/ Barclays one works well.

As Desperate Housewife says though, you have to make really certain that it is the product for you, 'cos the rate is a bit higher than you may be able to get elsewhere. Also, the customer service is pretty bad!

Bargain_Rzl

Personally if you can get an ordinary mortgage with flexible features, I don't see how an offset account provides a significant advantage. I have a Nationwide repayment mortgage which I treat as a savings account (because I can withdraw my overpayments at any time, I can afford to keep almost all my spare cash in there except for the amount I need in my current account to cover my basic living expenses), which is effectively the same as having an offset account only with a lower mortgage rate... I have about 20% of my mortgage balance "offset" in this way.

taka

:j Guess what? I've met my MFiT challenge target... a year early!! :j

Mortgage + potential loan @ April 07 £56,000

Mortgage (loan repaid early and I saved instead!) - savings earmarked for mortgage in the future (keeping a bit more out of the mortgage as increased emergency savings -will be reviewed once the 6.5% fixed rate runs out in a few months) @ March 09 £44,910.96

Target was £11k off in 3 years! Actual difference is... £11, 089.04 with a just over a year to go! :j Woooooohoooooooo!!

Next target... MAKING MY 1st OVERPAYMENT! :rotfl: Yep I've not actually made an overpayment yet lol!

ailuro2

Well done, Taka! Congratulations on reaching your goal so soon.:beer:

setmefree2

taka wrote: »

:j Guess what? I've met my MFiT challenge target... a year early!! :j

Mortgage + potential loan @ April 07 £56,000

Mortgage (loan repaid early and I saved instead!) - savings earmarked for mortgage in the future (keeping a bit more out of the mortgage as increased emergency savings -will be reviewed once the 6.5% fixed rate runs out in a few months) @ March 09 £44,910.96

Target was £11k off in 3 years! Actual difference is... £11, 089.04 with a just over a year to go! :j Woooooohoooooooo!!

Next target... MAKING MY 1st OVERPAYMENT! :rotfl: Yep I've not actually made an overpayment yet lol!

well done on your progress :T

Desperate_Housewife_2-2

well done taka!

angelavdavis

Fantastic Taka - well done!!!:T

hughmungas1986

Taka,

Congratulations on reaching your goal, yet another green line on the chart next month

hugh

esthomizzy

Does anyone have an opinion on this?

I currently have a 5 year fix with First Active at 5.79% the product has 3.75 years still to run and has a 5,4,3,2,1% early repayment charge each year. In June the ERC will change from the current 4% to 3%

I have some savings (7K) for my rainy day fund. In previous times they were handily earning equivalent to the mortgage in an ISA but now they are earning almost nothing.

My getout payment in June will be 6390 legals and valuation approx 850, exit fee 225 and new mortgage fee (599) if I go with post office 5 year fix at 4.15 (or 4.35% if I want free remortgage but the difference in rate would be more like 1750 over the term rather than 850 if I pay my own. So all charges 8k.

On my current mortgage assuming the same rate until 2014 (5 years) which in reality it wont be because my current fixed term ends mid 2013 but for the purposes of evaluation I have to assume this. I would save 6k overall on a like for over the 5 years (borrowing 223k rather than the 215k I currently owe, and taking into account it would take me almost the first year to get back to where I am now). However if I pay the fees with my savings (well 7 of the 8k anyway) then the saving is 13k because I'm back where I started much quicker albeit with the obvious factor of no savings. Next step. Now I'm familiar with using the whatsthecost site to work out repayments and terms etc and the reason for having a nice big slush fund is to cover a few months mortgage payments if anything unexpected/unpleasant should happen. Well I think that when/if I remortgage I'll for for an interest only product. Given the size of my required loan 215k currently I will be in a postion to make overpayments of a similar size to my normal payments (1650, well 1450 contractually but I usually pay 1650) but I will not be in a position to make overpayments beyond the permitted 10% pa so with the interest only product I would be able to make overpayments of over £500 (the minimum each payment is £500 for the product I have in mind). So if my contractual payment would become 768pcm I need much less of an emergency buffer. I can raise 750pcm from renting my spare room in an emergency (london is expensive).

Does my proposal make sense? Any downsides I haven't yet considered?

My aim is to continue or exceed my 1650pcm payments and get my term as low as possible. My current projected term on my existing payments is 17years on the proposed new mortgage it would be less than 15 but obviously at the end of the term I would have to meet the required payment at that time (whatever it is) to make it 10 remaining years at that point.

I think 4.15% for a 5 year fix is unprecedentedly low and I can't see rates staying so low forever and certainly not for the 5 years.

I also considered a yorkshire building society offset (4.79 for 5 years) but I've worked out that the offset facility would cost more like 110pcm more than the cheapest fix.

Any opinions appreciated.

Have a good weekend everyone
Esthomizzy