offset mortgage question

satrdayboy_2

i have an offset mortgage with YBS fixed at 2.84% until Jan 2016. I currently owe £28000, and my savings are same amount (my offset). Am i right in thinking that as long as i keep my savings the same as my mortgage, i pay no interest on my mortgage. Monthly payments should be about £180 but i am ovepaying to reduce the lenght of mortgage. Thanks

getmore4less

Yes you are

satrdayboy_2

Thought so. Thanks for confirming

Ma77hew

Do you need to think about reducing your offset savings each month, as your mortgage goes down.

I'd imagine each month your capital balance would reduce by £180, so savings would end up higher than mortgage earning I guess no interest.

Cyberman60

I have an offset and would not pay it off until the term runs out, the reason being that paying it off early reduces your liquidity for no benefit but one big disadvantage. I use mine as an equity release and a contingency.

Also, there may be penalties if you pay it off early. If the mortgage is costing zero, keep it IMO.

Notfarfromtheborder

Cyberman60 wrote: »

I have an offset and would not pay it off until the term runs out, the reason being that paying it off early reduces your liquidity for no benefit but one big disadvantage. I use mine as an equity release and a contingency.

Also, there may be penalties if you pay it off early. If the mortgage is costing zero, keep it IMO.

Same here, £105K 'facility' for next 20 years. The bit that takes will power is not using it again.....

satrdayboy_2

I pay £400 a month off my mortgage, i then transfer £400 into a nationwide cash isa.