100% Offset

Andysandy

That's how I would interpret what they've said.

DennisTenus wrote: »

So don't have to worry about having the full amount offset either? eg. £100K?

DennisTenus

I guess in that situation its important to withdraw the amount you pay on the mortgage each month from the offset savings account so it's not higher than the outstanding mortgage.

sal_III

When I was exploring offset mortgages I noticed they tend to be higher rates and high product fees. So instead I opted for a "normal" mortgage at 1.59% and put my savings in various savings accounts bearing 1.5-2% interests essentially earning me more than if I overpay/offset the mortgage.

DennisTenus

sal_III wrote: »

When I was exploring offset mortgages I noticed they tend to be higher rates and high product fees. So instead I opted for a "normal" mortgage at 1.59% and put my savings in various savings accounts bearing 1.5-2% interests essentially earning me more than if I overpay/offset the mortgage.

I was doing it this way but problem is that rates are higher now, generally over 1.5% and any money not in an ISA is taxed over the personal savings allowance, so effectively it's not feasible

silvercar

DennisTenus wrote: »

I guess in that situation its important to withdraw the amount you pay on the mortgage each month from the offset savings account so it's not higher than the outstanding mortgage.

Unless your mortgage is interest only, in which case fully offsetting means no payment is taken.

DennisTenus

silvercar wrote: »

Unless your mortgage is interest only, in which case fully offsetting means no payment is taken.

Is that possible with offset mortgages?

Notfarfromtheborder

dwsjarcmcd wrote: »

That’s exactly the reason I’ve retained mine with First Direct, although I haven’t used it for quite a while, so I should get round to closing it. As I haven’t drawn down anything, there are no repayments to FD and these would only recommence if I did draw something down

+1 here, had a FD offset with a £0 balance for 5 years or so, no payments made at all, only occasional interest charged if linked current accts go into -ve

silvercar

DennisTenus wrote: »

Is that possible with offset mortgages?

Don't know if it is possible now. Mine is over 10 years old and an interest only offset. About 80% offset, the lender doesn't seem bothered by me moving money from my offset savings into their own savings products when they bring out something with a better interest rate than I am paying.

6am

I had a full offset with Barclays. Every month they collected a fixed amount via direct debit which I then transferred back manually. Despite having a full offset they sometimes added an interest (1p). https://forums.moneysavingexpert.com/discussion/4334089

I complained and they explained, I do not remember details. I did not bother to pursue this issue further.

I was worried about compensation limit as well, but right of setoff should help.

I think it is a great idea to have a fully offset mortgage, go for it.

charlie792

Thrugelmir wrote: »

The mortgage would still need to be paid every month, combined with the interest earnt on the offset account this would reduce the balance owed. Meaning that the excess cash would have to withdrawn from the offset every month. Though the lender could have a minimum withdrawl limit on the offset.

Mine allows the monthly payment to be taken from the offset account, so the balance in the offset would be ever reducing in line with the mortgage balance.

I believe mine also allows you to pay in two ways, pay the full contractual amount including what interest I would have owed had I not been offset, or allows you to reduce the payments to whatever the capital plus interest accrued after the offset considered