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Offset Mortgage and Savings Protection
Craig_1988
Posts: 12 Forumite
Hello
Bit of a niche query but I can't seem to get a definitive answer online and want to clarify what the lender told me.
I drewdown an Offset Mortgage with First Direct this week. The mortgage balance is £110k and I have £110k in a Savings Account that is linked to/offsetting the mortgage account (so not paying any interest).
If the bank goes bust what Protection do I have? Understand FSCS covers upto £85k - would the remaining £25k be deducted from the remaining mortgage balance or is it not protected?
The mortgage is joint with my partner and I am wondering whether it is safer to open a Joint Account to hold some of (or all) the money in for £170k protection.
Many thanks
Bit of a niche query but I can't seem to get a definitive answer online and want to clarify what the lender told me.
I drewdown an Offset Mortgage with First Direct this week. The mortgage balance is £110k and I have £110k in a Savings Account that is linked to/offsetting the mortgage account (so not paying any interest).
If the bank goes bust what Protection do I have? Understand FSCS covers upto £85k - would the remaining £25k be deducted from the remaining mortgage balance or is it not protected?
The mortgage is joint with my partner and I am wondering whether it is safer to open a Joint Account to hold some of (or all) the money in for £170k protection.
Many thanks
0
Comments
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https://www.a-m-i.org.uk/wp-content/uploads/2018/04/Apr-2018-The-right-of-set-off.pdf
I looked into this. Basically you would get 85k back and the remainder set against your borrowing, so the amount above £85 isn't lost, but it would be used to reduce your mortgage rather than given back to you directly.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.2
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