Rejected on AiP for Barclays Offset

dannymccann

Currently stuck on SVR for another 32 years on an LTV of 69%. Have a good wedge of savings that I want to keep accessible but until they are needed would make sense to offset the mortgage interest against them (have a high value liability maturing in March 2020 we have been saving towards).

Since taking out original mortgage personal circumstances have changed dramatically; from DINKY's to single income, SAHM and 2 children, however my salary in the same time period has almost doubled. Not sure whether this is 'legal'or not but I have 'forgotten' to declare this information to the lender (they are getting their payments and have been without any issue - perfect customer!).

I appear to be stuck in the well publicised situation of 'not being able to afford a cheaper mortgage'. Current payments are £430 / m and we have been overpaying for at least 4 years now at least £50 / m; not a great deal I know but it's been making a small dint.

The Barclays offset I have been looking at over the same LTV, time period etc works out about £70 a month cheaper on the payment side, without incorporating any savings accrued over the term from offsetting the savings balance.

The AiP came back stating a borrowing amount of £52k, £45k short. I'm not sure how much impact declaring the £6k I have on 0% BT credit cards makes to that figure, and in any case, this balance gets paid off by minimum payment slowly and tarted at the appropriate times, so is at very little liability to us anyway.

Currently the savings are distributed as per the usual methods, maxed out high interest current accounts (although I am starting to run out of direct debits now :rotfl: ) which of course pay higher/same as current mortgage rate, Halifax pay us £15 / m in rewards etc but the remainder of the savings value is being eroded in the Cov 2.75% ISA (May18) (Santander killed their business with me when the £5 charge came on board in January otherwise the money would be sitting there instead). I also dripfeed the TSB 5% and Lloyds 4% regular savers. I'm fairly sure I have exploited every single savings pot!

Of course I could sink 10% (probably unlimited now on SVR...?) into overpayments but that money then becomes inaccessible, which is great moneysaving but goes against what I am trying to achieve here!

Further option could be to stick it into stocks, however these are long term and the capital is of course at risk, last thing I need is a devalue on the base pot.

I'm guessing every AiP / calculator from every major bank and BS is going to be the same. Are we simply stuck in this stupid situation until my wife gets back on the career ladder in 3 / 4 years time when DS2 gets to school age?

Apologies for the mammoth post!

amnblog

You wanted to borrow £97,000 on offset, but Barclays will only stretch to £54,000?

Is that right?

dannymccann

Correct, 97k is 69% LTV, as long as the value of the property hasnt dropped over the last 6 years!

amnblog

You may be overestimating the value of offsetting, especially if you are a basic rate taxpayer.

Your default position of a new rate with your current lender may be a stronger option than it seems at first sight.