Offset mortgage deal ending any advice?

pamelab21

We took the 5 year fixed offset First Direct mortgage at 4.99% in MArch 2008, so we are due to drop to the 3.69 svr shortly. We currently pay the mortgage like a repayment and we originally took 83,000 for 23 years and have brought the balance down to 63,000 in 5 years. property is worth approx 155,000.
I have heard that you need a joint income of 50k now to qualify for a new FD offset mortgage so I am wary of moving away from it as we would no longer qualify and really don't know where to go from here and who to ask.
We have approx 14k in savings. We're considering extending the house at a coat of around 20k and looking at the deals we could get we could take more money And still remain on the same term at 18 years or if we don't take the extra we could reduce the term to approx 12 years and still pay the same? Basing it on fixed rate deals, or I assume we could just withdraw on the offset deal we have if we decide to keep it.
Hoping someone can give some advice and hope this all makes sense!

Thrugelmir

Is your mortgage on an interest only or repayment basis currently?

pamelab21

Repayment basis and we chose to overpay 40.00 per month from the start and then added another 80.00 to that for the past 12 months or so.

Thrugelmir

Why not direct the overpayments into your offset account rather than the mortgage. Then fund the extension once you have the funds.

pamelab21

Would that not then take us many years to gather the money rather than keeping the term at 18 years instead of trying to drop it to 13 years?

Thrugelmir

By retaining the funds in the offset the choice is still yours as to what you do with them.

The interest earnt on the offset every month will continue to reduce the mortgage balance.

pamelab21

With the info I have given is it worth trying to hold onto the offset or best to switch to a fixed deal somewhere?

Thrugelmir

While you have sizable cash savings then the offset appears to be the best product.

If you were to spend them extending the property. Then would be worth comparing rates at the time.

The lower your mortgage balance is. The less savings you'll make in switching.