Combined Mortgage and overdraft Facility

lillford

I have an an account that is effectivly my mortgage and current account.

The current overdraft limit is approximately £40k, my salary is credited to this account on the last friday of each month. I have standing orders & D/Debits coming out of this account throughout the month.

Can you please advise me the best way to opperate this account.

holly876dog

i used to have a cam with IF but with my savings:mortgage the rate was too high to justify. A couple of things I did which maybe of use...
1. try super balance transfers into your account to offsett, there are some good tips and a list of cards on this site, be warned however you have to be careful or it will cost you
2. put all your purchases onto a cc, therefore keeping your account higher throughout the month, pay the cc off each month
3. as above with 2 can u put dd's onto cards keeping the account balance higher ?
4. change dates of dd's so you pay just before your salary gets paid, this way the balance stays higher in your acc
5. if you decide to use cc for purchases, go for one with cashback, the amex plat is vgood at 2% but you need to spend 7.5k/yr on this I think to get this rate, lower amounts still gives u cashback but at lower rate
6. look at the mortgage chat forum in the 'offsett crunching no's' thread. I was surprised at how much less effective offsetts really were, you maybe better off with lower mortgage rate and putting savings in isa's/high int savings accounts, this is not recommendation it just it worked out better for me.....

Rafter

You say it is 'effectively' your mortgage account.

If it isn't a secured mortgage arrangement you are presumably paying overdraft type interest rates (8+%) rather than mortgage type (5+%)?

In terms of management, I use a traditional offset where I still have a 'current accout', 'saving' and 'mortgage' pot.

You could do the same manually.

If say you want to repay the mortgage in 10 years you need to pay off around £350 each month as well as paying the interest.

So each month if your balance has come down by £350 you know you are on target, if not, you have increased your net position.

Couldn't face having a 'one' account and constanly just seeing a big mortgage debt each month but I guess it works for some.

R.