Offset Mortgages -- the Numbers

moonpreston

If you are previously offsetting. In that casing the formula doesn't vocation as you are comparing the attention cutback from offsetting with the estimated interest earned by offsetting i.e. accurately the same thing.

kingster2069

Ivebeensaved wrote: »

Feel like a fledgling flying amongst eagles, but looking for a bit of guidance here,...
We have an offset with 36K, nil in offset (4 yrs left) tracking BoE at 0.50% for life.
Our savings stand at 16K, 13 in Isa's, 10 @ 3.5%, 3 @ 2.9% other 3 ready to offset or save somewhere!
We currently pay £30 per month mortgage (interest) question is should we simply keep saving (£550 p month)
and pay the mortgage 0ff, which should take 3 yrs or offset the 16K saved and continue saving in Isa's or fixed rate bonds until paid off.
With the BoE rate expected to rise soon, this will have a great bearing I guess on which path to take.
Thanks for reading.

I eagerly (no pun intended) wait for eagle to swoop down and help me to flap wings and fly!... :A

My recommendation would be to pay the money into your ISA. Your new payment should attract more interest, if you are worried about rate rises then there are Cash ISA that track the BoE rates.
With your offset rate so low this has two advantages I can see.

1. To gain more interest the paying off your mortgage.
2. To maximize you ISA allowance.

If you are able to draw down on your mortgage the best way to maximize your income would be to withdrawal your cash ISA allowance each year on April 1st from your mortgage and then use the £550 each month to offset against your mortgage.

I hope someone will confirm or reject what I've said as it's always best to have a second/third/fourth opinion

LongTermLurker

moonpreston wrote: »

If you are previously offsetting. In that casing the formula doesn't vocation as you are comparing the attention cutback from offsetting with the estimated interest earned by offsetting i.e. accurately the same thing.

I think something was lost in the translation...

fatboy88

Hi, does anyone know if offset mortgages are available for the unemployed.

I mean my wife is due to sell her business so technically she will be mortgage free but we are considering an offset mortgage. She owes £70k on an £150k property and as she are looking at other businesses she doesnt want to tie this money up just in case.
She currently pays about £450pm on SVR with Halifax

thanks

Welshy213

Thinking of buying a place as currently fed up of renting.
Obviously looking to try and get this as cheap as possible while trying not to tie up too much cash in the meantime.

I am looking a houses in the region of £140k and hoping to get something for around £120k, £30k depsoit and then offset 100% of the rest.

Now my question, do FD offer 100% offset on I/O mortgages?
Other option would be low rate 2 year mortgage and put the £90k in a bond.

open to any suggestions,

Thanks

John

Cobwebs5

Hi,

I'm hoping for some advice from the experts on here. My house is worth £375,000 and my mortgage is £220,000 repayment with C&G on SVR currently £1400 per month. I have £220,000 in savings at Barclays earning very little interest. I have an income of £5,000 per month but would struggle to prove it and would not want to. Would you recommend an offset mortgage and if so who with ? Also do mortgage providers mind savings in excess of the mortgage.

Thanks for any help which would be much appreciated

diable

Cobwebs5 wrote: »

Hi,

I'm hoping for some advice from the experts on here. My house is worth £375,000 and my mortgage is £220,000 repayment with C&G on SVR currently £1400 per month. I have £220,000 in savings at Barclays earning very little interest. I have an income of £5,000 per month but would struggle to prove it and would not want to. Would you recommend an offset mortgage and if so who with ? Also do mortgage providers mind savings in excess of the mortgage.

Thanks for any help which would be much appreciated

Use the £220k to pay off the mortgage then start saving again.

I don't understand how you can ask a question like this with your savings and an income of £60k per year.

2sides2everystory

diable wrote: »

Use the £220k to pay off the mortgage then start saving again.

I don't understand how you can ask a question like this with your savings and an income of £60k per year.

Nah it's not quite so easy as that is it?

If I read their website correctly The C&G Standard Variable Mortgage Rate (SVMR) is currently 2.50%. at the moment so the £220K mortgage facility is costing around £460 a month in interest.

Cobwebs might be saying that it might not be so easy to get another facility like that if needed or wanted in a hurry e.g. for property speculation come the crash

Could be that if Cobwebs can't remortgage on an offset, Cobwebs can still get some of that £220K instant access at Barclays working a bit better if it is spread around a bit.

Depends what Cobwebs thinks it is worth paying to maintain a credit line like that during these troubled times - 10% of monthly income? Might be worth it to some ...

getmore4less

Cobwebs5 wrote: »

Hi,

I'm hoping for some advice from the experts on here. My house is worth £375,000 and my mortgage is £220,000 repayment with C&G on SVR currently £1400 per month. I have £220,000 in savings at Barclays earning very little interest. I have an income of £5,000 per month but would struggle to prove it and would not want to. Would you recommend an offset mortgage and if so who with ? Also do mortgage providers mind savings in excess of the mortgage.

Thanks for any help which would be much appreciated

Barclays may give you a mortgage if they see the income coming though the account.
Barclays also alow you to buils up cash ISA their offset.

Why are you not investing/saving the money with better rates. you can get 2.5% instant access.

thepixies

Hi all

I am confused as to whether i should keep offsetting my mortgage, pay it off early or move my money into savings and play off int/savings rates.
My details

mortgage left 100k; int rate is barclays base + 0.74 = 1.24% now
offset savings 70k
offset isa 30k

i reckon if my money into savings (and put in my wife's name who does not pay tax) i can earn approx 4k year interest (using some fixed rate bond accounts), compared to accruing 1.3k on my mortgage. If rates rise then I could always go back to offsetting.

Alternatively I could just try and pay off whole amount early.

Any suggestions/guidance ?