Offset mortgage

luigi1209

I am deliberating as to whether to use the savings in my offset mtge to pay off the majority of my loan now - or whether to hold onto some cash for that 'rainy day' everyone is telling me about!

Have £35k mortgage - (monthly repay'ts are £335) - £25,500 in savings

Any advice welcome

amnblog

what is the point if it is offsetting anyway?

getmore4less

Why are you considering it?

What benifit do you think this will give you?

luigi1209

I have come to the end of my 2 year fixed rate and am now on an SVR. I can now use my savings without any early repayment penalties
The mortgage is for 12 years and I will of course substantially reduce the interest payable if I use the savings to reduce the amount of the mortgage
Just not sure how much to transfer across or when

amnblog

If you are offsetting you are not paying the mortgage interest on an element equivalent to your savings anyway.

getmore4less

Have you really got an offset?

Do you know how they work?

stampede

With the amount of savings compare to your mortgage, you've done the right thing in getting an offset mortgage,
However, I don't think you understand exactly what you've done?

Leave it as it is & if you get into a problem finance wise, you'll still have money to draw on without the hassle of re-mortgaging etc.

Ozzuk

To echo above comments and having been bitten in the past, sure it's easy and maybe tempting to pay it off but if you ever need the money you could find it a real struggle to get any of it back.

Mattygroves2

Leaving your savings in the offset account achieves what you want and mantains your flexibility. We've got an interest only offset mortgage that is approximately 80% offset but I won't transfer it to the mortgage account until the end of the mortgage - at the moment it is saving me interest but if I need it I can get it out easily.

The decision to look at is whether you can earn more interest elsewhere than you are saving by having the savings offset. I managed to do that for a number of years and so moved the offset savings elsewhere but transferred them back when rates fell too much.

Happier_Me

Leave your savings in the offset. It is offsetting mortgage interest and so there really is no benefit in paying this off your mortgage balance.

We have an offset, owe about £62k of which £22k is offset. We expect to be mortgage neutral by Christmas 2015, which means our savings will fully offset our mortgage balance. I won't consider clearing the mortgage until I have a fair amount of genuine savings (savings over and above my mortgage balance) and I am confident I don't need to use the money for something else.

pjread

only Q being, what rate are you paying and what is your ltv? guessing well sub-60% but you never know....