Barclays Offset Mortgage Calculator

Tiger22

I was putting in some figures into the Barclays offset mortgage calculator (I'm too new here to post the link, but a google search for "Barclays offset mortgage calculator" will take you there).

It seems to me that the calculator is getting its numbers all wrong.

I put in a mortgage for £200,000 which was fully offset with £200,000 in savings over a 15 year period with a 2.98% interest rate. I then chose the priority option to reduce monthly mortgage repayments.

Now, given all those variables, the mortgage interest should be £0 as it is fully offset and all that remains is to repay the capital over the term. Therefore it should take monthly payments of £1,111.11 to repay the mortgage over the 15 year term. The calculator however returns a monthly payment amount of £882.57. Even more strange is that if I adjust the interest rate up to 10% (which should not change the monthly repayments when fully offset) the estimated monthly payment is reduced to £482.54.

Is their calculator hopelessly broken or am I missing something fundamental?

PParka

The £882.57 is the amount your first payment would be.
The graph should slope upwards as the years go by. The final payment should be around £1370.

Basically it works by giving you the maximum reduction at the start of the mortgage and slowly increases your capital repayments to ensure the mortgage is paid off in 15 years.

If you average the first and last payment amount (approx £880 and £1370) it should be close to the amount you calculated (approx £1110)

PParka

Tiger22 wrote: »

Even more strange is that if I adjust the interest rate up to 10% (which should not change the monthly repayments when fully offset) the estimated monthly payment is reduced to £482.54.

Same applies for a 10% interest rate:
Initial payment would be £482, but the final payment would be around £2150

Hope this helps.