Is it really worth while overpaying my mortgage?

upoiupou

getmore4less wrote: »

that's not how it works.

100% offset is no 0% rate it is borrowing £0

The effective rate mob are deluded.

I don't understand this at all. If you owe the mortgage lender the balance of your mortgage, how have you borrowed £0? And if you are paying 0% interest because of offset, how is that not effectively a 0% rate?

Unless you are saying that you have borrowed £x and invested £x so it effectively cancels out - which isn't the case if other nice people have invested £x on your behalf with linked accounts, and doesn't seem to be helpful in terms of looking at the effect when comparing what you're paying in interest on your mortgage (literally) with what you would be receiving in interest on savings (literally).

The deluded effective rate mob are getting mortgage statements saying that they haven't paid any interest all year, and no equivalent statements saying that they have got interest on savings all year. Hard to see the effective delusion.

Quite happy to hear your logic, but you need to say what it actually is.

getmore4less

If you borrow £100 at 5% and offset that £100 you are effectively borrowing £0 @ 5% not borrowing £100 @ 0%

Only offset £50 you are borrowing £50 @ 5% not £100 @ 2.5%

the convenience of the offset is you can borrow that other £50 at any time and pay the 5%.

edit to add.

To use any other method in any calculations/comparisons will get the wrong answers.