Offset Mortgages -- the Numbers

tip

Hi,
I've printed off the formula, I've printed off the spreadsheet. Haven't a clue how to use either really but it makes me feel organised having them! Thanks for all the useful info I've been gleening over the past weeks. I'm currently trying to find my best and hopefully last mortgage, only got another 7 years to go on the current one. Currently part interest only and part repayment, not yet decided whether to convert the endowment part. Does the offset formula allow for mixed mortgages?
Anyway...thinking about offset as an option. In fact I recently did a mortgage review with crrent lender northern rock and I plumped for the offset mortgage. I was still unsure about the product so allowed the 7 day offer to lapse, thinking it really would still be there if I made up my mind to go for it.
It's only 6 days after the lapse and I've just rung them to ask a few more questions about the product and they tell me they've discontinued it!
Just wondered if you knew why? I'm just curious. Was it such a good deal that they thought better of it? Damn!
And still thinking about offset but very nervous! Will have to start looking all over again now.... which means another month or so at 6.5%!

ccblinds

IF I RAN MY BUSINESS ACCOUNT THROUGH THIS AND MY SAVINGS ON AN 80K MORTGAGE WHO WOULD BE THE BEST TO GO WITH IN YOUR OPINION???

DO THEY REALLY WORK OUT??

ITS A MINE FIELD

THANKS

DAVE

silvercar

IF I RAN MY BUSINESS ACCOUNT THROUGH THIS AND MY SAVINGS ON AN 80K MORTGAGE WHO WOULD BE THE BEST TO GO WITH IN YOUR OPINION???

My Nat West business manager was telling me that you can use your business current account balance to offset your mortgage.

silvercar

Currently part interest only and part repayment, not yet decided whether to convert the endowment part. Does the offset formula allow for mixed mortgages?

Generally you can offset on a repayment, endowment or mixed basis.

LittleWoman_3

I have very simple system with my mortgage. I have a tracker repayment mortgage with Bank of Scotland (no penalties, daily interest). I have my personal account with the Halifax. On a day my salary goes into my account, I pop into the Halifax, and ask them to transfer the balance from the day before (which obviously I didn't need as it was still there!) to my mortgage. (Simple to do, give them my account card and they do it in seconds). Additionally I get additional lumps from other investments (shares cashed etc) from time to time, and I pay that over to the mortgage. I have had the mortgage now 6 months and have reduced my 25 year repayment mortgage to 21 years already. I actually have access to the overpayments (they sent me a cheque book) at any time, so I don't have a problem paying any spare money I have straight onto the mortgage. I think it actually stops me from spending it, as I like the idea of paying off my mortgage. I just remind myself how much extra cash every month I'll have once it done! :beer:

mummytwinton

help we had a mortgage consultant see us yesterday & we are now more worried than ever. we have the virgin one account house worth 195,000 mortgage £67,000 for now as we have £20,000 on 0% credit card for 12 months. also have car loan £3500 left to pay over 2 years. he told us to add all together ie £91,000 on to a normal mortgage. trouble is we like the flexilility of the one account & as we are only paying interest on £67,000 at the mow i can't see how paying a mortgage on £91,000 would be cheaper. i do have a friend who was on martins show & had a virgin account but doesn't now

i'm sorry i can't work out the tips on this site would anyone be so kind as to help.

he will add 1.95% of our new mortgage amount onto our mortgage for their charge??

EagerLearner

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chris1978_2

HELP!!!

My current mortgage offer with the Woolwich is due to expire in August. They have sent me a list of "offers" that I can move onto but our situation has now changed and we have a little in savings and no real other debt to speak of.

I took a look at the One Account site and their calculator makes the whole offset thing seem very exciting. WIthout pushing ourslves a great deal we could cut our term by more than half. The thing that put me off were their startup fees of £750 which I found a little extreme.

I have checked the Woolwich website and they also have an offset mortgage but no calculator to show how I could reduce the term. Does anybody know if their offset mortgage is comparible with the One Account? Also, has anybody had any recent horror stories with these offset type mortgages? Finally, Do they work???!!!

My hope was that if the Woolwich was comparible I'd be able to skip the whole valuation part of the application and save on fees.

Thanks for your help
Chris

Joe_Bloggs

@chris1978
You are probably not calculating things correctly if you think you will be better off on an offset with no savings. More likely you are in debt. Perhaps you have savings. Let the forum know of your current situation. Perhaps others can help.
J_B.

chris1978_2

Joe_Bloggs wrote:

@chris1978
You are probably not calculating things correctly if you think you will be better off on an offset with no savings. More likely you are in debt. Perhaps you have savings. Let the forum know of your current situation. Perhaps others can help.
J_B.

Joe, thanks for replying. We have some savings - around £10k and around £2k of debt which should be out of the way before the end of the year.

I guess my main questions are whether using your offset account as your current account makes any real difference and if you don't have a great deal to offset are you penalising yourself further with higher rates?