Is this a No Brainer

TonySoprano

Over the past 12 months I've been able to reduce my offset mortgage most likely because this last year being the first year I have been free of paying children's university fees.


My current offset is 0.95 over base 1.45% total with the current BOE base rate


My mortgage is calculated daily as is the Santander 123 account 3% deal so I set about doing some maths.


I have worked out 20k in my offset will save me 0.79p a day interest on my mortgage but 20k in a Santander account will gain me 1.32p a day after tax a profit of 53p



Physiologically I like the fact I’m reducing my mortgage with the 20k in my offset but realistically I’m doing myself out of a potential £15 quid a month (assuming rates stay the same). The BOE interest rate would have to rise to 1.45% before the Santander account negates the offset account


Just for my sanity have I got the calculations correct before I make the transfer?


Or has anybody got any other suggestions for the 20k bearing in mind both accounts are interest daily accounts without penalty?

edinburgher

You can split the amount between other accounts offering better rates. N@tionwide Flex Direct, TSB, Clydesdale Bank etc.

But yes, you can make more in savings than you're paying/avoiding in interest.