Interest FREE Mortgage from Credit cards

sibeks

I have been doing this credit tarting for sometime now and with an off-set mortage is doing wonders in avoiding paying interest.
If I can keep tarting my cards for the next 4 years then YES I have done it goodbye mortgage some 5 years earlier than planned.
Currently I have 0% credit cards on First Direct gold, M&S and EGG ( 2nd time around for EGG ( had one 3 years ago)) mounting to 31k.

Regards
Si

Clariman

You are an experienced 'stoozer' then. Using 0% money against an offset mortgage certainly gives the highest return at face value. However, to some extent, the benefit is offset (excuse the pun) by the slightly higher interest rate charges of offset mortgages.

Clariman

sibeks

Hi Clariman,
Yes I thought about that, but then I thought if I can offset the entire mortgage then it's as good as zero percent whether the offset mortage is 2% or 10% if you see what I mean. Also another benefit is it's tax free like an ISA but in reverse

Regards
Si
ps where did this "stoozer" come from?

Clariman

sibeks wrote:

Hi Clariman,
Yes I thought about that, but then I thought if I can offset the entire mortgage then it's as good as zero percent whether the offset mortage is 2% or 10% if you see what I mean. Also another benefit is it's tax free like an ISA but in reverse

Regards
Si
ps where did this "stoozer" come from?

To be honest I have not done the sums myself to weigh up the comparison of

* competitive ordinary mortgage with stoozed money in savings account (where interest is taxed)

versus

* slightly higher interest offset mortgage where the stoozed 'savings' are tax free

However, I know that it is the subject of some debate. But if you are making no mortgage payments out of your own cash then why worry

In answer to your question about where the term "stoozing" came from. It came from another financial discussion forum (The Motley Fool) where a member called Stooz was known to have used these techniques for a number of years. Someone referred to "doing a stooz" and then another poster used "stoozing" as a verb on 1st February 2004. It then just got adopted on the Fool website and then spread over to MSE and beyond. Martin has used it on radio and others have used it in print.

Some people don't like the term, but it just seems to work very well, because it adapts itself to a wide vocabulary e.g. stoozing, to stooz(e), stoozer, stooz pot etc.

Last year I wrote a Stoozing FAQ on the Motley Fool because so many people were asking about it. Stooz then bought the domain name (stoozing.com) for a laugh and we put my FAQ on it. It was very basic at first, but we have now made it a decent little site which Martin has been kind enough to sponsor (thanks again Martin). The original FAQ has been developed and split into sections, but there is still a FAQ and it gives the origin of the term at the bottom of the list

http://www.stoozing.com/faq.htm

Despite the googles ads on it, it is not set up as a commercial site. We put it together as a useful resource for stoozers and as a bit of fun.

Clariman

cronshd

Interesting discussion - and I'm going down this route myself. Without doing any precise calaculations, it just feels good to have a 0% interest mortgage.

I was wondering though, how First Direct would see it - as I assume they have set me up with a mortgage with intention of making some money from it.

If from day 1 it is at 0%, then if I was FD, I might be saying "why the heck did we lend this guy some money?".

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MastG

several years ago i read some articles on offset mortgages.

From what I could gather : on a £100,000 mortgage you would need to have £10,000 in savings offset against it for it to be worthwhile.
The more you have in savings offset the better off you are.
(complex modelling was used for this and I can only accept the models as being correct)

I have a mortgage with first direct and have savings +0% credit card transfer offset against it.

Without doubt offsetting the whole amount would be ideal.

First Direct gave a guarantee that their interest rate would be no more than 1% above the bank of england base rate (Woolich at one point was guaranteeing there's would not be more than 1/2 % above it).

Gary

Reaper

You can find the exact forumla as to whether you are better off with an offset or ordinary mortage here. However you will need to adjust it a bit if part of the money is at 0%.

I stoozed heavily with an offset mortgage and it helped me pay it off early.