Offset Mortgage + Tracker

Alex_the_Geek

I've recently been looking at remortgaging as my current deal ends in October. I have been very tempted by the offset mortgages, but like many people been put off by the increased interest rate.

I currently have savings of £25000 earning 5% - tax at base rate, and £15000 in ISA's which should really be moved to get a better interest rate. I have £110000 left on my mortgage with 21 years to run.

My thought was instead of taking the chance on the offset mortgage I could split the difference and have 2 mortgages. An offset of £60000 with a higher interest rate, but my savings cancelling some of this out and a second mortgage of £50000 with a better interest rate.

Would this be the best of both worlds ? Has anyone else tried this ? Is it possible ? Am I missing something ?

gallygirl

If you don't need access to savings why not just pay a chunk off mortgage and take remortgage at lowest rate possible?
I know all the 'experts' say you should have 3 months salary saved, but you sound like you have a good credit rating - could you get access to cash quickly if needed in an emergency? If so I'd def. advise getting rid of mortage asap.
If you're computer literate set yourself up a spreadsheet to show daily interest paid, pay off date etc - I'm currently paying £8 a day & am paranoid about clearing it!!!!