What do stoozers do with the money they gain?

nh

Be careful with offsetting. It has been discussed elsewhere on this board (in mortgages, funnily enough), that you need to offset at least half of your loan to make it worthwhile (as opposed to just getting a mortgage with a lower interest rate in the first place)

Example: My mortgage is a Nationwide tracker, we pay 4.79% currently.

Halifax's offset mortgage is 5.6%. I can't do the exact figures but you'd need a lot of your loan offset with halifax to end up paying less than you would with Nationwide.

Maybe someone more in the know than me can do the maths?

Reaper

offset mortgage ...
Maybe someone more in the know than me can do the maths?

The formula has been worked out. You can find it here.

smartsaver

Be careful with offsetting. It has been discussed elsewhere on this board (in mortgages, funnily enough), that you need to offset at least half of your loan to make it worthwhile (as opposed to just getting a mortgage with a lower interest rate in the first place)

Example: My mortgage is a Nationwide tracker, we pay 4.79% currently.

is it true that flexible mortgages do more or less the same thing as offsetting without the higher rate interest?  ??? Probally should post this on the mortgages board but as the discussion has started here.. maybe just one quick question pls  ::)

Martinslovechild

Is it true that flexible mortgages do more or less the same thing as offsetting without the higher rate interest?

Smartsaver,

The only real difference is that an offset mortgage takes into account other 'linked' accounts, e.g. current account etc. A flexi mortgage is basically on its own. I have a flexi mortgage and basically throw stoozed cash into it. My flexi deal runs at about 5.5% (which is lower than the likes of offset deals, e.g. if, one), but because of the amount stoozed in the overpayment fund, my actual pay rate is effectively less than 2%.

With both deals (flexi and offset), you can overpay, underpay. With some deals, you can also take payment holidays but I don't recommend taking these - pay the thing off, don't prolong it. I've 39 payments to go and counting (and i'm still in my 30's) !!!

Reaper

With an offset you put any extra money in a savings account (or bank account if that is included) which temporarily pays off part of your mortgage as long as you leave it there. The big advantage over a flexi-mortgage is that you can take it out again later if you change your mind. This makes it an excellent home for stoozed money in case you ever run out of 0% deals. The savings also earn "tax free" as you are just reducing your mortgage interest payments instead of actaully earning money on your savings. This is particularly valuable for higher rate tax payers.

The downside is that the interest rates on Offset mortgages tend to be higher, which is why they are best suited to those with plenty of savings.

Martinslovechild

The big advantage over a flexi-mortgage is that you can take it out again later if you change your mind.

You can do this with a flexi mortgage too - you have an 'overpayment' fund into which you deposit your stooz and can request to withdraw it at any point in the future. You simply have to tell them to pay any payments into the overpayment fund rather than treat them as a capital repayment. Once in the repayment fund, you can ask for some or all of this cash back at any time, hence they are excellent for stoozing.

smartsaver

Thanks for your help guys... Martin's Love Child & Reaper..

Flexible mortgages here I come ...

Reaper

You can do this with a flexi mortgage too - you have an 'overpayment' fund...

Nice. Then I happy concede flexi looks an excellent choice.

nh

So are flexible mortgage interest rates competitive then? What kind of interest rate or we talking?

Martinslovechild

So are flexible mortgage interest rates competitive then? What kind of interest rate or we talking?

I'm with Co-Operative Bank and can happily recommend them. Many people on the fool boards have also said the same thing.

You'll need their Flexible Tracker mortgage which charges 5.3% for mortgages up to 75% of the property value, or 5.5% otherwise. There's an acceptance fee of £399.