First Direct Offset Mortage

squiffyjack

Hello,
We have a First Direct Offset repayment Mortgage, we are very close to having the same amount in the "savings account" as to what is owing on the mortgage. What will happen when this is the same or we have more in the savings account?

Morgage_Confused

you will be paying zero interest on the loan. best to put any extra in an isa.

squiffyjack

So any money over the outstanding
mortgage amount in the savings account, will not be earning anything and not benifiting the offset.

Caladan

Indeed, at least that's how I understand it.

Morgage_Confused

thats right. it wont be earning any interest so dont have more in than you need(more than the mortgage balance). put it elsewhere where you get interest.

dimbo61

Well done on being Nearly Mortgage free :-)
Now you need to sort out savings
You first port of call should be cash ISA,s in both names ( you and other half?)
I have a repayment offset mortgage and also have nearly the same amount in the savings as we owe on the mortgage.
Now every month when we make a mortgage payment I have to take the same amount out and put it in savings.
Mortgage amount goes down and savings go up !!!

squiffyjack

Thank you for your replies

sebtomato

I would make a capital repayment for a large amount (say 80%) so that you are not tempted to use that money for something else, and then keep a linked savings account for the remaining 20%, which would be a cheap way to borrow money back at mortgage rate rather than normal credit rates if you need some money for a car etc. All other savings can be on normal, unliked savings accounts or ISAs.