Offset Mortgages

migs2323

Hi Everyone,

Just wondering if anybody knew whether there is limits/caps that banks place on the amount which can be held in savings/current accounts in an offset mortgage. Say you need a £100k mortgage and you have £100k in savings, does this mean that no interest payments are due?

Any advice here would be most appreciative.

Thanks,
Miguel

amnblog

Yes it does mean no interest payments are due Miguel.


Remember anything any individual has under deposit over £85,000 with a single bank is not protected if the bank collapses.

getmore4less

Setoff applies so less of an issue even if over £85k

dimbo61

Once you have More savings than you owe on the mortgage you are losing money!!!
So make sure once in that position you take out the " Mortgage payment amount" each month from the offset account and put in other savings IE ISA,s

migs2323

Thanks for the information, very useful. Is there a repayment mechanism on offset mortgages or are they all interest only. If no repayment option, how do you pay off the mortgage, ie. setting up standing orders each month to pay the mortgage off?

Thanks,
Miguel

getmore4less

Depends on lender,

Barclays use repayment,
FD interest only(unless that's changed).

need to check for others

dimbo61

You may find that most Offset Lenders will now want Repayment unless you have a very large deposit and Other Investments to pay off the mortgage at the end of the term