options, options and confusion

rockrat

i have recently taken heart from the mortage free thread posted somewhere on this forum the other day from the guy who overpayed and stoozed his way out of mortgage debt, and i have made a decision to do similiar.

but i cant decide how best to do it and would value any input, mainly in case i have missed something in the plan i propose below.
this post may ramble, if so bear with me

currently i enjoy a £96k mortgage with saffron walden BS, set at 0.2% above base rate for the life of mortgage with no lock-ins or penalties.
i have 23 years remaining on capital repayment, costing £650 a month.

i have no other debt currently other than £2700 left on my wifes car loan with 10 months remaining. The monthly cost for this is £240.

any option i take must have no lock ins and be penalty free. I have fallen foul too many times of lock ins and the fees to move when deals end, so wish not to be in that situation again. On this rule i am immovable.

i currently put away around £650 a month into an isa, one for me and one for the wife. But i am now thinking i would benefit more from overpaying the mortgage instead.

i could also stretch and pay a little more, but not too much.

If i was to payoff the car loan when remortgaging, then the total i could afford to pay on a mortgage payment per month could be £1700.

current mortgage payment - £650
current loan payment - £240
current ISA payments - £650
propose additions - £160

total possible - £1700

Thats the details, here are the options i currently have by not changing anything.

I could simply overpay on my mortgage the extra £1050 a month from what i pay now. There would be no fee to do this. but once i do this i cannot get it back should something unforseen happen in the future. inhave called the bank and confirmed this. I would like the chance to scale back some months if needed, you never know.

i could continue to put the money into the isa, but the interest there we all know will not have the same effect as bringing down the mortgage amount and its interest each month.

so, i propose to get an offset mortgage.

I have found a tracker mortgage with hinckly and rugby BS, thats almost the same as my current on, at 0.25% above base, no penalties ect, but allows the facility to offset. The setup fees are £595.
The monthly fee for my £96k mortgage are the same, and offsetting an additional £1k a month would reduce the term to 10 years. yay!

but i propose going further if i have got it right.

i am proposing i take a mortgage for £150k for the same 23 years initially, which would have a monthly repayment of £1010 a month.
i intend to instantly offset the £53k that would be left after paying off the wifes car loan.
This extra amount will not be spent, but would allow the opportunity to port the mortgage if at somepoint in the future we look to move into a house of a similiar value give or take, without any risk of additional costs should it ever happen.
This just gives that possible opportunity at no risk.
offsetting this amount alone will give the same basic overall reduction in mortgage term as mentioned above, paying it off in around 10 years.

Then i intend to pay the additional £700 on top each month into the offset account. By doing this i have forecast i can reduce the term to roughly 6 years.

By doing it this way i have the option to access these overpayments should it be required, but gain the full benefit of offsetting.


then, i will attempt to stooze additional amounts into the offset account, of which the monthly card payments would be made from the £700 overpayments mentioned above.
i have been good at balancing several 0% offers in the past and am organised enough not to !!!!-up this part.

now, how does all that sound, have i missed anything?
any advice and comments, especially on a mortgage product i may have missed would be welcome.

matt