What lenders allow more than 10% overpayments?

Thrugelmir

BoxerfanUK wrote: »

I haven't considered an offset because I prefer to have my savings separate from my borrowings rather than all lumped into one,

The savings are held in a separate account. The interest earnt on the offset account is credited to the mortgage account every month thereby reducing the balance owed. Your capital savings remain fully accessible.

BoxerfanUK

Thanks for all the replies, some food for thought. :beer:

jamesd

Offset mortgages are also great for saving mortgage interest with stoozing. You can spend on a 0% for purchases credit card and put the money you spend into an offset account instead of paying off the card. Do it for all possible purchases and things like Council Tax if you can. At the end of the 0% deal you use the money in the offset account to clear the card. You've then effectively been paid your mortgage interest rate for borrowing money on the card. Not many better deals than being paid to borrow!

It can also pay to do this with credit card balance transfer deals, depending on the fee and mortgage interest rate. A 3% fee for a year or more will be profitable for someone paying more than a bit over 3% in mortgage interest. A bit over because the card repayments each month slightly increase the interest equivalent of the fee by reducing the amount borrowed.

Depending on incomes and credit history it's entirely possible to do things like having £30-50,000 of mortgage and paying no interest on it at all.

Thrugelmir wrote: »

The savings are held in a separate account. The interest earnt on the offset account is credited to the mortgage account every month thereby reducing the balance owed.

That is not an offset account and the interest would be fully taxable as usual. Offset accounts work by subtracting the daily balance of the offset accounts from the daily balance of the mortgage and only charging the mortgage interest on the remainder.

getmore4less

Thrugelmir wrote: »

The savings are held in a separate account. The interest earnt on the offset account is credited to the mortgage account every month thereby reducing the balance owed. Your capital savings remain fully accessible.

That is not how offsets should work that makes the interest taxable.

What should be done is the debt and savings should be pooled and interest charged on the net debt.

That's how Barclays do it.