Virgin Money Stooze

Han_naH

Steve - your mortgage interest is likely calculated daily, so your % on what you owe / 365.

So every day that extra money off the credit card is in your flexible mortgage account is a bonus, as the amount owed is lower.

Importantly, you should have a flexible/offset mortgage (so you can take the funds back out the mortgage account, and put back on the credit card at the end of the free term).
Also important is that you take into account the card's fees (this case, 3%) and those all important dates!

YorkshireBoy

Steve1981 wrote: »

Once again I am probably missing something but could you not transfer this straight from a current account against the mortgage without having to do the cheque side of things?

Yes, there's no need to use cheques with Virgin. OP hadn't realised there would be very little credit left to use up with the cheques due to the £25 per month minimum payments. He probably thought he would have to pay 2.25% per month.

Also do I have this right in that you pay the min monthly payment (£25) and then at the end of the 0% transfer it back to pay the card off and the time you have been using it against the mortgage has reduced the interest that you pay?

Yes, or BT the card's debt on to another card instead...and leave the money working for you in reducing your mortgage interest.

Exactly how does this work/is there a starters guide in terms of step-by-step? as obviously my mortgage is my biggest debt and my real aim is to get it cleared asap?

I understand it can work with flexible mortgages allowing overpayments/drawdown, but it works best with an offset mortgage. Don't go diving straight in though...read up first. Check out the mortgage-free wannabe board, and look for the infamous Martinslovechild's posts...he's a TV celebrity now you know.

Steve1981

leejp wrote: »

Steve - your mortgage interest is likely calculated daily, so your % on what you owe / 365.

So every day that extra money off the credit card is in your flexible mortgage account is a bonus, as the amount owed is lower.

Importantly, you should have a flexible/offset mortgage (so you can take the funds back out the mortgage account, and put back on the credit card at the end of the free term).
Also important is that you take into account the card's fees (this case, 3%) and those all important dates!

So I think I am with this - could I say have several cards - BT them against eh f/o mortgage and then pay the minimum payments against them each month and just before the end of the 0% period transfer out to pay them off (or alternativey just get a different 0% card to clear those)?

I understand that there are bigger savings to be made from this in the long run, but what kind of savings can be expected? is that dependent on the rate?

I have 101,000 left on my mortgage with 23 years left at present currently at 6.49%?

CannyJock

Steve1981 wrote: »

I have 101,000 left on my mortgage with 23 years left at present currently at 6.49%?

Your best bet would be to put this together in a spreadsheet. Use 0.5254% per month in your calcs (good enough approximation to give you an idea). One column for mortgage, one column for offset account, one column for interest, one for repayments and finally a total at the end.

Calculate interest on the difference between the mortgage and offset account. Total at end of each month would be Mortgage + Interest - Repayment. Copy this down to the Mortgage columns on the row below.

Use that as the basic model and play around with the figures, seeing what happens to the Total column.

Han_naH

The cards you use to stooze, Steve, should be 0% - yes - but also to put the money in your mortgage account you need to write one of the credit card cheques. And these comes with a handling fee.

With Virgin and MNBA it's about 3%, which compared to your 6% mortgage rate for example, represents a 3% gain (plus the tax gain, but that's another discussion).