Flexible Mortagage and savings

Cieurniht

I would appreciate some advice on the below.

I have a flexible mortgage with First Direct (which I am very happy with) and at the moment offset all of my savings (approx £20,000) against my mortgage which has approximately £200,000 remaining.

Due to a recent family death, my wife and I will soon be in receipt of approximately £100,000 inheritance, which I would like to put to best use.

We are considering placing the bulk of the cash in our linked savings account to the mortgage, since we will then offset nearly half the remaining mortgage (at approx 2.5% interest), but I am slightly concerned with having so much money within one bank following the banking crisis a few years ago (OK - accepted, I do not expect HSBC to go out of business).

Am I being too cautious, or is the concern valid, and are there any better alternatives?

Thanks in advance.

getmore4less

Set off applies so the money is safe in that the worst case is it reduces your debt.

Offset just mean you are borrowing less.

Then it is down to finding better investments and having ready access to cheapish money.

mgfvvc

Cieurniht wrote: »

We are considering placing the bulk of the cash in our linked savings account to the mortgage, since we will then offset nearly half the remaining mortgage (at approx 2.5% interest), but I am slightly concerned with having so much money within one bank following the banking crisis a few years ago (OK - accepted, I do not expect HSBC to go out of business).

Am I being too cautious, or is the concern valid, and are there any better alternatives?

In a joint account you are both protected up to the limit of £85,000 each, unless there is evidence that the money is not equally split. This means you are covered up to £170,000 by the government compensation scheme, as long as the linked account is a joint account .