happy quandry

suered

Dear All

After very little life and much overpaying (on an offset mortgage) I now find myself very shortly approaching the position where my savings stash plus fluctuating current account will actually outnumber what I owe on my mortgage:T

But when I reach that point, what do I do? I HAVE to keep my rainy day stash as I firmly believe that the day I spend it will be the day I need it for something else and it provides the bulk of the money that puts me in this situation. Do I then spend the rest of my mortgage (maybe 2 years) just not getting interest on the difference (which probably won't be a huge amount) or is it worth sweeping across to a new interest paying account every month or so? Or is there another MSE trick that I'm missing?

thanks

Martinslovechild

Am I right in assuming the following?

Mortgage Outstanding Balance = Savings Balance

Both are in an offset account, therefore the net balance on your mortgage = £0.

I'm not sure whether the bank continues to collect payments or not (it depends which bank you're with). When my net balance hit £0, the bank considered my account closed unless I called them and asked for a drawdown from the overpayment fund.

You might consider keeping your savings balance just slightly less than the (outstanding mortgage balance minus normal monthly payment), e.g.

if Mortgage Balance = £20,000
Savings = £20,000
Normal Monthly Mortgage Payment = £600

Then consider reducing your savings to £19,300 (i.e. slightly below the £20,000 balance minus £600 = £19,400). Each month you would need to withdraw an amount equal to your normal monthly mortgage payment to keep this going until the mortgage naturally ends; in the meantime, you could move the savings that you're withdrawing into a high-interest account (e.g. Sainsbury's Bank 6.25%) or Cash ISA (e.g. NS&I 6.3%). If your offset account allows it, simply set up a standing order to move this money automatically into the Sainsbury's account.

suered

hi MLC (and adding my congrats to the list)

yes, it will be savings plus current = mortgage so effectively zero and shortly after savings alone = mortgage so zero.

Your plan sounds eminently sensible and I shall put it into action.

Thank you.