Which lenders offer offset mortgages?

Deedoodee

silvercar said:

Deedoodee said:

silvercar said:

In my mind, and I am someone who has sometimes used a broker and sometimes not, there are 2 parts to getting a mortgage:
1. Will they lend the money
2. is it a good deal for me personally.

if you are confident on point 1, eg LTV, property type etc and have the necessary income and credit rating to secure the mortgage then the focus is on point 2. So for offsets it is a crystal ball measure of how well you will use the offset in the future. If you are confident that you will use the offset facility to your advantage then you can go it alone, if you aren’t so sure then a broker could help.

For what it’s worth I have an offset, and have used the offsetting facility to good use over the years. 

Thanks. We’ll see a broker and see what they say. YBS is the only one I’ve seen with no product fees.

when you say use the offset to our advantage, is there something besides juggling the costs? 

I’ve modelled various interest rates scenarios (accounting for tax on interest earned ), cash flow and expected large expenses in the next two years in an excel. 

What I mean is that you will actually put some savings into the offset, rather than it being an unused "nice to have". 

Thanks. Yes we would definitely put savings in there if we have it. I got some inheritance so we’re looking to reduce interest payments while interest is high and reduce the taxable interest. 

Cortinaa_GTR

I'm in a similar position with a redundancy payout and remortgage both due in the next 6 months. My current lender doesn't offer offset but changing provider completely while job hunting feels fraught with danger too. I could sink money in to reduce debt levels but thought offset at least allows me to keep access to the cash. Is there a general rule of thumb for the threshold of offset saving level v debt level to make it worth while?

amnblog

Cortinaa_GTR said:

 Is there a general rule of thumb for the threshold of offset saving level v debt level to make it worth while?

Not one that will replace Professional advice. Each situation is different. The overall interest is not the only consideration.

Deedoodee

amnblog said:

Cortinaa_GTR said:

 Is there a general rule of thumb for the threshold of offset saving level v debt level to make it worth while?

Not one that will replace Professional advice. Each situation is different. The overall interest is not the only consideration.

What are the other considerations? 

I spoke to a broker and he didn’t have much to add beyond what I’ve said here (cost of not gaining interest, might need to take the money out later and then you’ll be paying a higher rate)

housebuyer143

Deedoodee said:

amnblog said:

Cortinaa_GTR said:

 Is there a general rule of thumb for the threshold of offset saving level v debt level to make it worth while?

Not one that will replace Professional advice. Each situation is different. The overall interest is not the only consideration.

What are the other considerations? 

I spoke to a broker and he didn’t have much to add beyond what I’ve said here (cost of not gaining interest, might need to take the money out later and then you’ll be paying a higher rate)

That's really it. I thought long and hard about offset but in my situation it was better for us to get the cheapest rate and then put the money in savings accounts. We are currently neutralising the mortgage interest this way. If rates were lower I would consider it a good idea. 
Everyones case is different though..I can get all my interest tax free so a 6.2% rate is just that. 

Deedoodee

housebuyer143 said:

Deedoodee said:

amnblog said:

Cortinaa_GTR said:

 Is there a general rule of thumb for the threshold of offset saving level v debt level to make it worth while?

Not one that will replace Professional advice. Each situation is different. The overall interest is not the only consideration.

What are the other considerations? 

I spoke to a broker and he didn’t have much to add beyond what I’ve said here (cost of not gaining interest, might need to take the money out later and then you’ll be paying a higher rate)

That's really it. I thought long and hard about offset but in my situation it was better for us to get the cheapest rate and then put the money in savings accounts. We are currently neutralising the mortgage interest this way. If rates were lower I would consider it a good idea. 
Everyones case is different though..I can get all my interest tax free so a 6.2% rate is just that. 

Thanks. How is all your interest tax free? Is your 6.2% a fixed rate account? 

housebuyer143

Deedoodee said:

housebuyer143 said:

Deedoodee said:

amnblog said:

Cortinaa_GTR said:

 Is there a general rule of thumb for the threshold of offset saving level v debt level to make it worth while?

Not one that will replace Professional advice. Each situation is different. The overall interest is not the only consideration.

What are the other considerations? 

I spoke to a broker and he didn’t have much to add beyond what I’ve said here (cost of not gaining interest, might need to take the money out later and then you’ll be paying a higher rate)

That's really it. I thought long and hard about offset but in my situation it was better for us to get the cheapest rate and then put the money in savings accounts. We are currently neutralising the mortgage interest this way. If rates were lower I would consider it a good idea. 
Everyones case is different though..I can get all my interest tax free so a 6.2% rate is just that. 

Thanks. How is all your interest tax free? Is your 6.2% a fixed rate account? 

Yeah, I have money split into fixed accounts, and easy access. I get 6.2% on my fixed and then 5.2% on easy access, plus between 6%-7.5% on my regular savers, of which I have 5. 
Anything over 5.3% and I'm breaking even with the mortgage. The easy access isn't quite there but the ones that are over make up for that. 
We have 75% of the outstanding mortgage balance in savings currently.

I work part time and so have the ability to earn £8k in interest before it becomes taxable. I therefore hold all the household savings in my name to benefit.

Whether offset works for you is a personal thing and definitely depends on your tax band I would say. I would be more inclined to get offset if I were paying 40% in tax. 

Deedoodee

housebuyer143 said:

Deedoodee said:

housebuyer143 said:

Deedoodee said:

amnblog said:

Cortinaa_GTR said:

 Is there a general rule of thumb for the threshold of offset saving level v debt level to make it worth while?

Not one that will replace Professional advice. Each situation is different. The overall interest is not the only consideration.

What are the other considerations? 

I spoke to a broker and he didn’t have much to add beyond what I’ve said here (cost of not gaining interest, might need to take the money out later and then you’ll be paying a higher rate)

That's really it. I thought long and hard about offset but in my situation it was better for us to get the cheapest rate and then put the money in savings accounts. We are currently neutralising the mortgage interest this way. If rates were lower I would consider it a good idea. 
Everyones case is different though..I can get all my interest tax free so a 6.2% rate is just that. 

Thanks. How is all your interest tax free? Is your 6.2% a fixed rate account? 

Yeah, I have money split into fixed accounts, and easy access. I get 6.2% on my fixed and then 5.2% on easy access, plus between 6%-7.5% on my regular savers, of which I have 5. 
Anything over 5.3% and I'm breaking even with the mortgage. The easy access isn't quite there but the ones that are over make up for that. 
We have 75% of our mortgage amount held in savings currently. 

I work part time and so have the ability to earn £8k in interest before it becomes taxable. I therefore hold all the household savings in my name to benefit.

Thanks a lot for detailed reply.  

We can offset a similar amount but both work full time so only get ISA allowance and PSA

dimbo61

I am a Hugh fan of Offset mortgages and have has 4 over the last 22 + years.
YBS, Woolwich and now Barclays. 
I really can't understand why they have not taken off big style in the UK with self employed people and people with savings, regular bonuses,  variable  income each month.
The rates are slightly more expensive  than say a normal 2/5 years fix YBS is 0.3% but if you can build up savings or the bank of Mum and Dad ( Sister/Brother  or Auntie Flo ) can help its Tax free saving.
YBS have 5 year fixed rate deals with No fees and free valuation 

maybeitsbecause

amnblog said:

There are about half a dozen Lenders offering offset mortgages currently. those mentioned above, plus, Clydesdale Bank, Family Building Society, and Scottish Widows Bank.

They are not the type of product that is sensible to apply for without the services of an independent broker.

I took out a Scottish Widows offset mortgage myself, but you haven't been able to apply directly in years. They make you go through a broker now. Whenever I've contacted Scottish Widows, their customer service has been really good.

Personally, an offset mortgage has worked very well for my lifestyle. Like @dimbo61, I don't know why they aren't more popular in the UK.