Worth paying a £595 fee for 0.3% less on BoE base rate offset mortagage?

jimwilson_2

Hi

I am coming to the end of my special offer BoE +0.75 offset account.
Now I think I'd do best pretty much sticking with the YBS. My mortgage is 37000 and I'll be putting about 7 thousand into the offset account.

There are 2 offset mortgages offered by the YBS one is BoE+ 0.45 with a £595 fee. The other is 0.75 with no fee. There are a couple of other differences but none that bother me. I have tried to work this out in my own head and cannot figure out a calculation as to what would be my best option. I think what I need to know is how long I'd need to keep the BoE + 0.45% to make it worthwhile paying the £595 fee.

Any pointers would be much appreciated.

Thanks

Jim

jimwilson_2

Sorry, forgot to add that they are both full term trackers.

Jim

ohmsoft

Do you mean you will be offsetting £7k in savings, if so interest will be charged on £30k.

On Interest only mortgage the 0.45+ will save you £90 per year so if you intend to keep for 7 years plus this will work out better - you will need to keep a bit longer on repayment to see benifet as the ineterst part will reduce.

jimwilson_2

Thanks Ohmsoft, just the advice I was after.

Jim