Offset Mortgages -- the Numbers

getmore4less

They should declare this income.

It makes no difference to costs overpay or offset, net interest should be the same.

Check with the lender if they have the keep payment the same option without penalty(most likely they do).

powerhouse_2

Hi all first time user but long time lurker
We took out an offset mortgage (so we thought) 3 years ago after advice from an independant financial advisor through the woolwich (barclays). 10 year term.
We have now worked out that the offset was never set up (kept getting told it was the attached savings account) and to make it worse the advisor told us that if we borrowed money but left it in the offset account we would not be paying interest on it until we used it.
As it turns out our mortgage that was 44,000 has basically been 64,000 due to the 20,000 we borrowed to be sat in the offset.
Any ideas if we have any comebacks and who it would be aimed at?

Regards powerhouse

getmore4less

powerhouse wrote: »

Hi all first time user but long time lurker
We took out an offset mortgage (so we thought) 3 years ago after advice from an independant financial advisor through the woolwich (barclays). 10 year term.
We have now worked out that the offset was never set up (kept getting told it was the attached savings account) and to make it worse the advisor told us that if we borrowed money but left it in the offset account we would not be paying interest on it until we used it.
As it turns out our mortgage that was 44,000 has basically been 64,000 due to the 20,000 we borrowed to be sat in the offset.
Any ideas if we have any comebacks and who it would be aimed at?

Regards powerhouse

Have you not been checking the monthly statement which show which accounts are offset the total offset and the saving in interest on a daly basis?

You would also have had statements for each of the other accounts showin interest paid since they were not offset.

Where did the £20k come from?

You need to got back to Barclays and the advisor to give them a chance to sort it out.

Are you sure it was an offset?

deedee71

getmore4less wrote: »

Have you not been checking the monthly statement which show which accounts are offset the total offset and the saving in interest on a daly basis?

I have an offset mortgage with Intelligent Finance and the statements don't show any of these things. I remember right at the beginning of the mortgage phoning up and getting them to check all my accounts were linked, but there is no way of checking online.

getmore4less

deedee71 wrote: »

I have an offset mortgage with Intelligent Finance and the statements don't show any of these things. I remember right at the beginning of the mortgage phoning up and getting them to check all my accounts were linked, but there is no way of checking online.

The OP mortgage is with Barclays, and they should be getting monthly statements and have on-line access if they wanted.

powerhouse_2

getmore4less wrote: »

The OP mortgage is with Barclays, and they should be getting monthly statements and have on-line access if they wanted.

We had been recieving statements for the mortgage account and a 'savings pot' attached to it (wrongly assumed this was the offset) but having been to see Barclays today it seems they have never done an offset account with this style of mortgage. We borrowed an extra 20k on what we owed on the mortgage after the advisor told us we would not need to pay interest on it unless we used it?? Penalty charges for lump payments are large so not viable. Worse again we have approx another 20k we were wanting to put in the offset

getmore4less

The orginal docs would have been clear this was not an offset?

What mortgage do you have?

Barclays do what is called a mortgage reserve account on all(most?) of their mortgages and it is true that this account only charges if you take the money out.

Check if a mortgage reserve account that is positive gets offset or just interest and if nterest what rate.

You should be able to repay the reserve account without penalty if you did withdraw it.

Anything in writing about setting up an offset?

powerhouse_2

getmore4less wrote: »

The orginal docs would have been clear this was not an offset?

What mortgage do you have?

Barclays do what is called a mortgage reserve account on all(most?) of their mortgages and it is true that this account only charges if you take the money out.

Check if a mortgage reserve account that is positive gets offset or just interest and if nterest what rate.

You should be able to repay the reserve account without penalty if you did withdraw it.

Anything in writing about setting up an offset?

Thanks.
We borrowed the extra 20k on the mortgage which was to be transfered in to the offset account as soon as things were set up so as things stand basically we have a 64k instead of 44k mortgage.
It is a 10 year fixed 4.98 switch and save mortgage.
Still looking for documentation about the offset but spoke to the financial advisor last night and he is still 'under the impression' that there should be an offset available?
He is investigating today

getmore4less

I don't recall barclays ever offering offsets on fixed.

I am checking my docs for something else so had a look at the offset stuff.

We switched in 2004 when Barclays mortgages were still branded Woolwich

Offset is on all the docs
Application
key feature doc
offer
stemets

The Woolwich and Barclays brochures and T&C at that time specificaly says offset only available on trackers

Obena

So - do you think it is better to pay off the mortgage straight away, or to get an offset mortgage? Also - what are the problems with an offset mortgage compared to paying it off in one go.... ? Thanks