Once more with feeling...

freddykrueger

Any advice would be appreciated

Tilly_MFW_in_6_YRS

I think you probably need someone like Lois_E or Abouttimetoo, Financial Bliss or Originalmiscellany to help you with your questions. Edinburgher may be able to help you as well. GallyGirl may be able to help as well.

If you look at the MF forum, then you'll find everyone

I'm not great at these types of questions and I would probably ask one of these if I needed advice

Best wishes Tilly

edinburgher

£800/mth overpayment on a mortgage of £86450 @ 3.5% with an 18 year term will reduce the term to 5 years. That sound about what you worked out?

What is the rate on your savings? It's the big question if you're considering whether an offset would be a suitable solution.

freddykrueger

Thanks that's exactly what I was looking for - interest rate is 2.5% on an ISA through Nationwide. I would only move to offset if it will help shave more time off my mortgage and just trying to play about with numbers.

Thanks for all your help.

edinburgher

Well, unless you can get a mortgage rate lower than 2.5%, you'd seem to be best off overpaying/using an offset to hold your existing savings.

I don't think putting the money into an offset would reduce the time it takes to pay down your mortgage, but it would reduce your interest freeing up more money for OPs. So it does end up doing that (but only if you OP the money saved).

freddykrueger

Thanks again edinburgher I need to take a look at some offset products....

edinburgher

I think your LTV is under 75%, should be eligible for most of these products assuming you meet income and expenditure requirements etc.

jimmybrid

Freddy,

My advice would be to focus on the most important aspect of this whole thing, which is the mortgage, it's rate and whether it's the right thing for you.
We have 2 offset mortgages with First Direct and they work really well for us, mainly because the larger one is such a good rate (BR + 0.79 = 1.29%). The equivalent product now is available from 75% LTV but the rate is BR + 2.89% (3.39%) with a £499 arrangement fee.
This would give you a small reduction in your mortgage rate, but with the advantage that you could transfer the cash from your ISAs into a linked current account and effectively "earn" 3.39% on those too. The product also gives great flexibility as you can draw back any capital you have paid if you have any emergency expenditure, so your mortgage effectively acts as your emergency fund too.

I can't speak for offset mortgages offered by other providers so, as always, do your homework before you commit.

freddykrueger

Well my finances were a lot healthier than I expected this month due mainly to the fact that we have cut back on things like takeaways and also have been taking packed lunches to work.

Made overpayment of £600 which I never thought I would do this month.

freddykrueger

Never had this much motivation since I gave up smoking over 8 years ago. It's encouraging that over the past month and a half that I have managed to shave a year off the mortgage

I'm just that bit closer to doing what I want to do....