Offset Mortgages -- the Numbers

getmore4less

Barclays allow you to offset cash ISAs.

Remember the are tax free for life so worth keeping.

No offset can "work harder" than any other.

karren

Hi, im after some quick advice,
we have a morgage for 68,000 with 12 years left on it
intrest free credit card for about 1,000
and 1,000 in a rainy day isa account (with 2 kids we need it)
And desperately need a newish car about 5,000

And am thinking of setting up a virgin one account as would love to pay the morgage off long before the kids go to uni etc so we can help them, has anyone had a good or bad experince with them?
or is the offset morgage a better deal??

getmore4less

karren wrote: »

Hi, im after some quick advice,
we have a morgage for 68,000 with 12 years left on it
intrest free credit card for about 1,000
and 1,000 in a rainy day isa account (with 2 kids we need it)
And desperately need a newish car about 5,000

And am thinking of setting up a virgin one account as would love to pay the morgage off long before the kids go to uni etc so we can help them, has anyone had a good or bad experince with them?
or is the offset morgage a better deal??

What make you think the one account will help?

How much surpluss money do you have at each month to save/overpay?


Also your rainy day fund is probably on the low side, it might cover the odd unforseen expence but what happens with the loss of income?

jamesd

karren, your situation seems to be a poor match for the Virgin deal. It's mostly good for those who have 30% or more of the mortgage balance going into and out of the mortgage account every month. Others can get better deals with a normal offset mortgage that will usually have lower APR.

For the car there is a Virgin product that may be of interest. The Virgin credit card offers 16 months at 0% interest and for a 2.98% fee you can balance transfer money into your current account to use to buy the car. If you haven't paid it off by the time the 16 months are over you can look for another card that offers a balance transfer deal and transfer the balance to it to extend the 0% time.

BaobabAmy

S6Si wrote: »

Hi newbie here!

I am also looking at the One Account or First Direct offset. Can someone please explain in black and white if your savings are working harder for you in the One Account?
The One Account looks to good to be true and is always assuming your left over money each month is paying off the Mortgage. It is slightly deceiving but basic all the same.
I have been a long standing FD customer and have no problems with them at all. I just want my money to work harder for me. I have a HSBC business account which I intend to move money from to my FD offset or OA and back again on a regular basis. I understand that money going to a OA from HSBC could take as long as 3 working days to clear!! Any advice?

I have 30K+ in cash ISAs which I am about to cash in and pay 15K off when I remortgage and have 15K as an offset. The ISAs are getting no return, am I mad to do this or?

Thx
S6Si

These days most transfers are instantaneous. When I opened a One Account and started transfering over the money from my old HSBC (ordinary graduate) account it all went in the same day.

CMS1_2

I found Mortgage Introducer very useful, it's a monthly mag but the daily email alerts were brilliant with the latest offers and news. It really helped me to make a choice of mortgage that was suitable to me and my family's finances. I emailed the editor and was told that Homebuying dot co dot uk might help as well, it's another of their sites apparently.

JimmySave

Here's a different slant. If you have over £50,000 of savings linked with an offset mortgage and the bank goes bust. Do you end up stillowing the full amount of your outstanding mortgage but now only £50,000 as guaranteed by the FSCS. Or do they write off as much of the mortgage as possible with your savings before applying the £50,000 protection toany balance of savings? I'm going to open this question up as a separate thread as well.

darich

I'm thinking about changing to an offset mortgage but i can't find anywhere that will confirm my figures because i want to make overpayments. The offset mortgage will reduce my payments by about £100 but I want to continue to pay the £100 as an overpayment.

Does anyone have or know where I can find a calculator that allows for the input of additional payments??

thanks
David

_dave__4

darich wrote: »

Does anyone have or know where I can find a calculator that allows for the input of additional payments??

You could try this one: http://calc-calc-calc.net/get/calc/Mortgage-Overpayment/

HTH

PJGILL

Is there any greater effeiciency in paying off the capital on a mortgage or keeping it in the offset account as cash and then paying off the capital once you have built up the cash amount to match it?