Offset Mortgage advise required

Pm01king

I currently have 180k equity in my property and are considering buying a property abroad for 120k.
I also have a pension lump sum of 130k due in 7 yrs time.
I am looking to pay the property abroad off on receipt of my lump sum.
I have been advised to look at a offset mortgage which appears great, but does anyone know of any pitfalls with this type of mortgage deal?
Thanks

jaybeetoo

I've had an offset mortgage for a very long time. The mortgage is in one account and I can define which accounts I want to use in the offset.

As a higher rate taxpayer, I get a better rate of return than if I'd put the money in a savings account.

The only pitfall I can see is to make sure you can pay off the mortgage when it becomes due.

amnblog

The only thing you have to watch is that the pricing on the offset product interest rate is always higher than a standard product.

Covered if you use the offset facility, needless expense if you do not.

TrickyDicky101

amnblog wrote: »

The only thing you have to watch is that the pricing on the offset product interest rate is always higher than a standard product.

Covered if you use the offset facility, needless expense if you do not.

... and by the sounds of it you ain't going to be using the offset account for 7 years - so you'll be paying that higher than required rate for a long time.

jaybeetoo

amnblog wrote: »

The only thing you have to watch is that the pricing on the offset product interest rate is always higher than a standard product.

Covered if you use the offset facility, needless expense if you do not.

Not true - my mortgage isn't like that

dimbo61

Have a look at a couple of lenders websites and see for yourself what the difference is between an ordinary repayment mortgage and an offset one.
For example the YBS charges 0.1% more for offset deals than repayment mortgages.
I love offset mortgages and we have used them to pay down debts over the last 10 years.