Offset Mortgage Advice

Wobblydeb

getmore4less wrote: »

Depends what they are calculating,
Probably not what you think they are calculation.

You will need to provide an example.

Don't bother with the MSE calculator(s) they have too many flaws to be useful.

Can you suggest a better one? I'm trying to decide between offset and repayment for next period, and it's quite a complex set of data!

Thanks

callmemonks

Wobblydeb wrote: »

Can you suggest a better one? I'm trying to decide between offset and repayment for next period, and it's quite a complex set of data!

Thanks

Complex isn't the word... and everytime renewals come around you've forgotten all the complex data analysis you did 2 years ago!

getmore4less

Wobblydeb wrote: »

Can you suggest a better one? I'm trying to decide between offset and repayment for next period, and it's quite a complex set of data!

Thanks

Depends what you think you need to work out and what will make you decide one option against another.

It is rare that an offset is cheaper than just having a smaller mortgage on a lower rate.

getmore4less

callmemonks wrote: »

Complex isn't the word... and everytime renewals come around you've forgotten all the complex data analysis you did 2 years ago!

Keep a record of the analysis you did or put it in a spreadsheet so you can duplicate it next time round.

In many cases the analysis is simply which leaves with the smallest debt at the end of the period.
(that does not break any of the soft measure like reputation of lender, exit costs, overpayment limits etc.)

getmore4less

One simple calculation for an offset mortgage is what offset pot is break even.

You need to know the saving rate the offset rate and the regular rate to decide if the offset works.

simple ratio of the rates and amounts.

M : mortgage debt
S : standard rate
O : offset rate

C : savings capital
N : net savings rate

C/M == (O-S)/(O-N)

Wobblydeb

I should probably just suck it up and build an Excel model My variables include two mortgage amounts (and fixed period end dates), an initial pot of cash plus monthly savings. My savings rate is at varying rates and amounts because the pot includes regular savers and lower rate chunks. If I ignore the regular savers, I would still need to factor in the lumps coming in at maturity.

Oh, and potentially large payments out of the savings pot every 4 months.

getmore4less

Once you are at that level the flexibility outways any cost differences.

You just pick a decent lender and track rates down.

The glory days of base rates+ <1.0% and 50k stooze(0%,£0fees) pots is over.

robatwork

Wobblydeb wrote: »

I should probably just suck it up and build an Excel model My variables include two mortgage amounts (and fixed period end dates), an initial pot of cash plus monthly savings. My savings rate is at varying rates and amounts because the pot includes regular savers and lower rate chunks. If I ignore the regular savers, I would still need to factor in the lumps coming in at maturity.

Oh, and potentially large payments out of the savings pot every 4 months.

Surely your scenario is exactly the flexibility an offset mortgage is designed to facilitate?

silvercar

Someone on here created a complex excel spreadsheet years ago. It's still available if anyone can find it.

I'll have a quick look soon.

silvercar

https://forums.moneysavingexpert.com/discussion/1157173/my-excel-mortgage-spreadsheet

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