whos got cheapest 5 or 10 year fix?

allan673

i put the post up, looking seriously at it but a bit unsure?

jem16

allan673 wrote: »

i put the post up, looking seriously at it but a bit unsure?

Unsure in what way?

allan673

jem16 wrote: »

Unsure in what way?

i know its fixed at 5.15% for 10 years, but would it work out exactly the same as a standard repayment mortgage over 10 years on the same rate? - bear with me lol !

TighterThanTwoCoatsOfPain

yep, same as repayment mortgage... you pay by standing order from a FD account and they will tell you how much you need to pay to clear the mortage.

The offsetting is just one of many flexible features of the deal..

jem16

allan673 wrote: »

i know its fixed at 5.15% for 10 years, but would it work out exactly the same as a standard repayment mortgage over 10 years on the same rate? - bear with me lol !

As the above poster says it's exactly the same as a standard repayment monrtgage.

The offset feature simply allows you greater flexibility - you don't need to offset.

allan673

thanks for clearing that up for me, i was just unsure as it seems the best deal at the moment and i was wondering if there were any catches and i was missing something - much appreciated !

dweeby

allan673 wrote: »

thanks for clearing that up for me, i was just unsure as it seems the best deal at the moment and i was wondering if there were any catches and i was missing something - much appreciated !

Only thing you're missing, is that it is better than that!

Overpay? as much as you want, anytime, no fees.
Underpay? as long as you cover the "interest only" part, you can under-pay anytime, no fees.
Need cash? anything you've paid off your mortgage can be drawn back again (like for an emergency?), so sort of a loan at mortgage interest rates. No fees.
5% tax-free on savings? put savings into your offset account, and you're basically getting 5% (tax-free) interest on them.

Set up a standing order into your FD account, and its just like a repayment mortgage.

As far as I can see, if your eligible (earnings multiples, LTV ratio) it's a no-brainer. Someone has yet to give me a "downside".

lisyloo

I'd recommend filling cash ISAs bfore offsetting (but that's not a downside).

Firstly you can get better than 5% at the moment.
Secondly the amount is tax free for life whereas oevrpaying the mortgage is tax free only for the term of the mortgage (and for most people life will be lnger than term).

I'd also point out that I don't think you can directly overpay as there is an early redemption charge, however you can offset.
In practice it's the same think but just thought I'd point it out.

It COULD be an issue if you want to claim state benefits.
e.g. someone who has overpaid and has a £50K mortgage and zero savings may fare better with means tested benfits than someone that has a £70K mortgage but £20K savings as savings do count against you.
A minor issue but one I thought worth mentioning.