First Direct Fixed 5.25 fixed offset

silvercar

Interesting that it is on some of the scraper mortgage sites, yet not offered through brokers.

Is there a difference between putting savings in their (linked) savings account and paying it off the mortgage; presumably it can be taken back in both cases.

gil13

Haven't actually got my figures in front of me, but i think it worked out marginally cheaper to pay of say 10k of the mortgage(take out a lower amount) than it was to put the same in the offset part, perhaps due to the interest over a 21 year term. but like I said don't quote me on it as the figures are not with me today and i may be totally wrong.

jediknightwarrior

silvercar wrote: »

Interesting that it is on some of the scraper mortgage sites, yet not offered through brokers.

As I understand it, First Direct stopped accepting business from mortgage brokers on the 20/12/2007.

Which is why I asked L&C the questions here. My concern is to make sure their products are not being used to generate calls and then completely ignored when making recommendations. To me it seems a reasonable assumption that if a product is listed on a brokers website then it should form part of their recommendations (unless they clearly highlight it is only available direct).

Maybe L&C can still receive commission from FD but I don't believe this is the case. Would be nice if they could confirm either way.

TighterThanTwoCoatsOfPain

gil13 wrote: »

Haven't actually got my figures in front of me, but i think it worked out marginally cheaper to pay of say 10k of the mortgage(take out a lower amount) than it was to put the same in the offset part, perhaps due to the interest over a 21 year term. but like I said don't quote me on it as the figures are not with me today and i may be totally wrong.

That would sound right... I'm not very good at explaining it but..

If you pay off the capital rather than offset then you will have less captial to repay over the term. If you just offset, then the interest payment is reduced, but you still have to pay off that 10k to FD over the term of the mortgage, and at the end of your term you still have the 10k (with no interest accrued) in the bank, whereas you wouldnt had you paid off the capital in the first place.

Sure someone will confirm or correct!

browniej

dweeby wrote: »

7. I can't find any "downside", apart from possibly the mortgage multiples and LTV rations.

What will happen if FD's valuation on the property does not match actual value? I wonder how close to real value they are.

Very interested in this deal but may be just too close to the LTV margin.

Also notice that moneysupermarket.com had a higher total amount over 2 years than I could work out when adding 24 monthly payments plus the fees. Am I doing something wrong?

TighterThanTwoCoatsOfPain

They say "in certain circumstances they will go to 90% ltv"

dont know what they are but worth trying them...bare in mind that they're that busy due to the cracking deals they're throwing out at the min, it may be a few days before they can call you back...

I've crunched all the numbers and every scenario i could think of and its a winner for me..

browniej

OK may do that.

Do they provide a Key Facts illustration if you ask them? Still can't figure out the figures from FD's website and the screenscrapers.

TighterThanTwoCoatsOfPain

yep they do.. they post them out (dunno why an internet bank doesnt e-mail em! lol)

I think every provider has to do KFIs now... Only trouble is their KFI only show the interest on the offset deals, as they are Interest Only with a facility to overpay the capital if you want. They will tell you how much capital you need to pay to clear the mortgage over any number of years you want..

gil13

you can do both calculations on the first direct website, for interest only and repayment, this will give you the monthly payments for both. your commitment is to make the interest repayment, but then you just set up a transfer from the first direct 1 account to cover the capital - takes a bit of getting used to but not a real problem. the flexibility this gives you is pretty good, you can effectively switch between interest only and repayment style mortgage whenever you like. just have to keep in mind that the capital will need to be repaid at the end of the term. i guess if you took a 20 year term it would give you plenty of scope to attack the outstanding amount via a combination of repayments, external ISA's, unit trusts etc. I guess some might even repay the capital via their lump sum pensions and effectively use the difference between the interest & capital to chase stock market or other investments. it has certainly got me thinking about what potentially you could achieve but all needs to hedged against the risks with timing and stock market performance at the end of the term.

browniej

I'm pretty close to the 80% LTV on this and only if FD value the house at the price I pay for it.

If they agree in principle but then value it at less will the offer change? At what point would they tell me this as I would need to find a mortgage elsewhere?