Should I start with an offset

darwin

Hello,

We're looking to buy a property and would be taking out a loan of £319,000.

After paying our deposit and moving costs we'll have around £50k in savings and would hopefully be able to save around £12k per year.

I'd like to be Mortgage free as soon as possible so I'm trying to decide whether we'd be better off getting a normal five year fix at 1.58 or a five year fix with offset at 1.99.

The MSE calculator shows we'd be ~£4k better off over the initial five year period with the normal fix but confusingly the Excel spreadsheet made by @Locoblade showed the offset would be better.

I know offsets are popular with people who are trying to get to mortgage free so any advice would be welcome.

Thanks

savingholmes

If your are sticking with borrowing so much I think I would be tempted to take a lower fixed rate - and try and find a savings plan that pays you more than that. You could work towards being mortgage neutral that way. Why are you borrowing so much if you have £50K in savings? I am in favour of emergency funds but that sounds excessive... I would reduce your borrowing if possible and eliminate the temptation to over-spend.