I dont want to sound stupid, but, just a quick question

everton09

Hi, Im sorry if some of you think this is a silly question but I would rather look stupid on here than phone my bank and look stupid there .

I have recently remortgaged with First Direct and have an offset mortgage with a savings account linked to the offset, I am looking to overpay £100 per month, Do I put it in my offset savings account every month or am I supposed to pay it straight off my mortgage?? Sorry to sound dull but im new to offsetting.

Thanks in advance,
Mike.

MortgageMamma

I'm not well versed with the first direct products since I generally dont sell them but with most offsets you have two choices

Pay it off the mortgage, thereby reducing the capital balance and not being able to retrieve that money easily (there are usually limits on how much you can pay off)

Pay it into your offset savings account, thereby the interest gained on the savings will reduce the interest payable on the mortgage

Best bet is to call ING and get them to talk you through it

owner

With a First Direct offset it makes no difference whichever you do, the result is the same. I would think it better to pay into the mortgage a/c myself as it then seems to be reducing the mortgage and you will feel less inclined to spend it. You can however take it back out of your mortgage a/c at any time so that is why there is no difference.