Offset Mortgages -- the Numbers

helentwentynine

I'm currently thinking of going for an offset mortgage, will this type of mortgage product be extinct soon?

tali

The MSE offset calculator is not working.

Gambler

Are there any guides for a strategy once offset savings are greater than the outstanding mortgage?

I still have 14 years left.

getmore4less

tali wrote: »

The MSE offset calculator is not working.

It gives wrong answers anyway so don't bother with it.

getmore4less

Gambler wrote: »

Are there any guides for a strategy once offset savings are greater than the outstanding mortgage?

I still have 14 years left.

Find better places to put the new money and the offset funds if you find somewhere.

Cash flow to fill S&S ISA, CASH ISA, fund Monthly savers, etc.

Depending on lender the excess funds may be getting no interest so come up with a stratagy.

hugo15

Gambler wrote: »

Are there any guides for a strategy once offset savings are greater than the outstanding mortgage?

I still have 14 years left.

I'm fully offset. I have just left the money in the offset account so I pay no interest, but I make sure that there is exactly the same in the offset account as the amount of outstanding mortgage and not a penny more. I still pay a mortgage payment each month but then transfer the equivalent amount out of the offset account into my current account. The advantage for me is that I still have access to the funds in the offset account if I should need it, e.g. redundancy, illness.

My focus now is on retirement planning so I'm using the amount I was paying on my mortgage to make AVCs, save in a S&S ISA and build up a new car fund in a cash ISA.

PParka

Gambler wrote: »

Are there any guides for a strategy once offset savings are greater than the outstanding mortgage?

I still have 14 years left.

I'm skimming any excess of the top and paying it into any account I can find that pays a semi-decent interest rate.

I got a letter from the bank that asked my to call them to "discuss my options as my offset savings exceeded my outstanding mortgage" I'm quite happy to have an intrest free mortgage for the next 18 years :rotfl:

Gambler

hugo15 wrote: »

I'm fully offset. I have just left the money in the offset account so I pay no interest, but I make sure that there is exactly the same in the offset account as the amount of outstanding mortgage and not a penny more. I still pay a mortgage payment each month but then transfer the equivalent amount out of the offset account into my current account. The advantage for me is that I still have access to the funds in the offset account if I should need it, e.g. redundancy, illness.

My focus now is on retirement planning so I'm using the amount I was paying on my mortgage to make AVCs, save in a S&S ISA and build up a new car fund in a cash ISA.

I'm still paying a monthly amount as I like to see the mortgage amount shrinking !

giger

I'm also thinking of going offset but it seems it is difficult to compare these mortgages.

I've currently got a lifetime tracker with Britannia, but there is a 1% penalty to pay for another 18 months if I remortgage elsewhere.

Santander seem to offer a decent offset, but it comes with £495 setup fee, plus you have to pay costs (survey and solicitors fees). Coventry Building Society also have a tempting low fee offset but it is based upon their own flexible rate, currently 2%. Does anyone have any experience of these products?

Are there any other good offsets to consider right now? I don't qualify for the FD one.

I will have a lump some equivalent to 50% of my mortgage to potentially offset.

brightlight14

Hi there,

I'm new on here (and terrible with finances!) and would be grateful for your advice.

I have an offset mortgage which is fixed at 3.45% for the next two years.

I have just over £60k left on the mortgage.

I also have index-linked savings certificates with NS&I (which they no longer issue) which total £36k, along with an ISA account doing poorly at the moment (1% - I know I need to sort this) which has £14k in it. So I have £50k in total.

I'm wondering if it's better for me financially to withdraw the money from the index-linked savings certificates and the ISA and put it all in the offset mortgage account? Or is it better to leave the cash where it is?

Sorry if this is obvious, but I haven't a clue which is the best option!

Thank you in advance for your patience with me and your advice.

Nelly