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Offset Mortgage Interest Rates and FSCS
shermy31
Posts: 1 Newbie
Two quick questions:
1. My offset interest rate is now lower than I can get on savings - should I take money out and put in savings instead (take into account savings interest tax), is it that simple?
2. Last post I could find on this was 2008 so just wanted to check - anything over £85k in the offset savings account isn't protected by FSCS am I right? i.e. with 150k mortgage and 100k in the offset, if the worst happened, I would only be protected up to 85k and would then owe 65k, not 50k?
1. My offset interest rate is now lower than I can get on savings - should I take money out and put in savings instead (take into account savings interest tax), is it that simple?
2. Last post I could find on this was 2008 so just wanted to check - anything over £85k in the offset savings account isn't protected by FSCS am I right? i.e. with 150k mortgage and 100k in the offset, if the worst happened, I would only be protected up to 85k and would then owe 65k, not 50k?
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Comments
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1. Makes sense as you will earn more in interest than your mortgage costs you.
2. No it isn’t right. I looked into it because we have our mortgage nearly fully offset and it’s more than 85k. See link below. You could lose the right to all your savings back, but they would be netted off your mortgage under insolvency law.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Here: https://www.a-m-i.org.uk/wp-content/uploads/2018/04/Apr-2018-The-right-of-set-off.pdf
So basically the savings pot of the offset would be protected up to £85k or £170k for couples, the remainder would be netted off what you owe.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
So in your case, if the worst happened. With 100k in the offset, 85k would be protected and refunded to you and 15k would be netted off your 150k mortgage leaving you with 85k in the hand and a mortgage of 135k.shermy31 said:Two quick questions:
1. My offset interest rate is now lower than I can get on savings - should I take money out and put in savings instead (take into account savings interest tax), is it that simple?
2. Last post I could find on this was 2008 so just wanted to check - anything over £85k in the offset savings account isn't protected by FSCS am I right? i.e. with 150k mortgage and 100k in the offset, if the worst happened, I would only be protected up to 85k and would then owe 65k, not 50k?I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
A Bank would not be allowed to go bust.0
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