re mortgage - should I do offset?

Hagar_uk

Hi everyone.

Looking for some advice. not sure what is the best thing to do to try and money save.

In a nutshell I have about 8 years remaining on my mortgage. currently with high street bank in standard variable rate of 4 %.

I owe about 36k on the mortgage

I have no other debt except credit card which is only usually paid off each month.

I have about 9k of savings in high interest current accounts. however I have reached the ceiling point of which the interest is paid.(Tesco and hbos)

I currently like to overpay on very ad hoc basis and try to save each month.

I am on the cautious side. hence why I have my savings easy to access. hence have not overpaid all my savings.

I am wondering what is the best plan going forwards. offset mortgages were all the rage a while back but has gone very quiet of late. is it still worth it doing?

Glover1862

I was thinking of doing something similar, however Ive got £110k and £50k Id want to offset.

I was thinking about The Coventry BS flexx for the term product, its 1.85% for the full term but has £999.00 fee, that might make unviable for you. No early repayment charge, its variable but as you pay interest just on difference and rates rising won’t matter too much, they certainly take a while to get to what you are paying.

I would add as much as possible to the saving account and leave overpaying the mortgage, Id hope that soon the saving would catch up with the mortgage balance, id be mortgage free if I pressed a button to transfer the funds, however at that point Id be paying no interest on the loan. If I carry on paying the mortgage as normal, I would eventually have the offset balance and the mortgage paid off. You would have access to the saving anytime which makes it attractive.

Thrugelmir

Hagar_uk wrote: »

I owe about 36k on the mortgage

With a owing balance that small. A fee free option from your current lender is by far the best option.

AnotherJoe

Start by switching to a mortgage with a more sensible interest rate. 4% is criminal.

dimbo61

Well I love Offset mortgages and have had 2 in the last 13 years.
Have a look at a couple of lenders that offer offset mortgages
IE YBS or Barclays and see if they have any Fee Free deals.
However with only £36,000 left on your mortgage staying with your current lender BUT looking for a new deal for existing customers Could be the cheapest overall.
So check out your current lender

dimbo61

only Halifax/Bank of scotland have an SVR of 3.99%

Halifax
https://www.halifax.co.uk/mortgages/existing-customers/switch-to-a-new-deal/?srnum=1


BOS
http://www.bosmortgages.co.uk/newdeals/

pennystretcher

Definitely look into remortgage with current lender, and after that if you still can't find better interest for your money elsewhere, overpay within the allowed limits and save rest..

MortgagesUnlimited

Hi,

I would look to remortgage to a cheaper lender and reduce the term at the same time, any over payments that you make should come straight off the capital amount.

You have such a small mortgage only the fee free options will make sense.

Accord/ YBS charge a higher interest rate on their offset products if I remember correctly.