Offset Mortgages -- the Numbers

MarkyMarkD

Right ... if it's the BBR+0.18% mortgage then the rate is incredibly competitive. But I didn't think that one was an offset?

Tesco_points_addict

mark...just off to dig out details, be back soon! All i can remember was paying xtra set up fee for cheaper rate

Tesco_points_addict

OK, just read bumf

Lifetime off set tracker +0.59% (2NG)

Does this make sense to you?

k1mmie

My husband and I are with First Direct. Originally had an offset mortgage and current account. Ran into problems when husband was made redundant and they kept accruing the mortgage on a daily basis. They eventually came up with the brainwave of culminating the current account and adding this on to the mortgage(they said this was the only way to clear it).

However the repayments then became very high and we struggled to meet them. We asked about changing this to a different type of mortgage that may reduce our committment each month - however they were not interested.

First Direct sent out information several months ago that they were changing this type of mortgage to a repayment. But have not heard anything since about this.

So currently have mortgage arrears and a high monthly payment that we can only afford to repay the interest part on.

However, as we have decided to sell the house and repay all this and go for a slightly smaller mortgage - I am concerned that we will be now given a poor report by First Direct and thus stop us from obtaining another mortgage.

Feel like we may be stuck!!!!!!!!!!!!!!!!

Any ideas greatly received..........

jamesd

k1mmie, get your two Pound statutory credit reports from the three main credit reference agencies.

Sloganjerry

Hi All,

I would be very grateful if someone could please put me right with some advice on these offset mortgages. My situation is that I have £20,000 in savings and an outstanding mortgage balance of £76000 on a house worth £275000. I'm due to remortgage at the end of June when my discount and ERC period ends. Some friends have recommended an offset as they reckon they've saved thousands in interest and reduced the term of their mortgage.
I obviously wish to do the same save money and pay my mortgage off as soon as possible. Is an offset the best option for me?

Sorry but it's so hard to get my head round exactly how these offset mortgages work? Help please!!!

Cheers

Sloganjerry

MarkyMarkD

Most people who reckon they've saved money through offset are just believing the propaganda that Virgin and the like have fed them.

If you don't need the £20k in any circumstances, remortgage for £56k and set a shorter repayment term. You'll save loads of money in interest.

If you might need the £20k in a lump sum at some point in future, get a flexible mortgage (which allows overpayments and drawdowns), remortgage for £76k and then overpay the £20k the next day.

If you might need the £20k in lots of dribs and drabs, and keep putting bits in and out of your savings, then it MIGHT be worth having an offset. But probably not.

mark567

MarkyMarkD wrote: »

Most people who reckon they've saved money through offset are just believing the propaganda that Virgin and the like have fed them.

I just checked Intelligent Finance and they offer a 75% offset tracker (the one I want) at 0.19% above BBR compared with halifax offering 0.34 % above BOE base for non-offset. Admittedly the arrangement fees are a bit more for IF (850 quid instead of 500 quid). Does this just mean Halifax is rubbish, or IF is one of the exceptions? I've yet to try one of the brokers. Will do that tomorrow.

I'm also very confused about the advice given so far, and think IF is a no-brainer, but am looking for the catch (no, I don't mind changing my current acount...).

We both work, so that's going to influence the decision, but still.

MarkyMarkD

The IF 75% offset tracker you mention at BBR+0.19% is for 3 years and then the rate increases to BBR+0.62%.

I'm not sure which Halifax deal you are talking about - sorry!

The Woolwich deal I have referred to before is BBR+0.18% for the life of the mortgage below 60% LTV and BBR+0.29% for the life of the mortgage between 60-80% LTV. That has NO fees at all. I still think that the Woolwich deals are among the best available if you want a lifetime tracker. I can't see any reason to choose IF (and pay an up-front fee) rather than Woolwich.

mark567

MarkyMarkD wrote: »

I can't see any reason to choose IF (and pay an up-front fee) rather than Woolwich.

Awesome advice :j . And Barclays seem to have the same deal as well.

Sweet.