Offsetting??

CasG

hi, just extending an ear out there for some advice...
I am exploring a fixed offset term. I've always been told that offset mortgages are a waste of time unless you have one or all of the following: a small mortgage eg. <£30,000; chunky savings eg. >£25,000; or fall in a high tax bracket. However, the rates for some offsets are pretty competitive with general fixed terms of the same length that seem to be around at the moment, (also a comparatively low arrangement/product fee). I find it difficult to see why not to offset - surely it allows you to pay off more capital, hence shorten your mortgage?? Am I falling into an obvious trap? Is there a ratio of savings vs mortgage which I should be looking at? Should I be keeping some savings back in ISAs?

cazmanian_minx

I've got the Intelligent Finance offset and they allow you to offset a cash ISA against it, so you can still keep some savings in ISAs. Don't know if you can transfer ISAs in though.

Caz

dimbo61

I have a fixed offset mortgage for the last 2 years and I think they
are great. there is lots of flexibility in whether you save into the offset
or move the offset money into ISA,s if they pay a better rate of interest.
Every penny saved is a penny less interest I am paying out on.
overpaying and offsetting is the way to go GOOD LUCK

Capricorn_One

CasG wrote: »

hi, just extending an ear out there for some advice...
I am exploring a fixed offset term. I've always been told that offset mortgages are a waste of time unless you have one or all of the following: a small mortgage eg. <£30,000; chunky savings eg. >£25,000; or fall in a high tax bracket. However, the rates for some offsets are pretty competitive with general fixed terms of the same length that seem to be around at the moment, (also a comparatively low arrangement/product fee). I find it difficult to see why not to offset - surely it allows you to pay off more capital, hence shorten your mortgage?? Am I falling into an obvious trap? Is there a ratio of savings vs mortgage which I should be looking at? Should I be keeping some savings back in ISAs?

I think what you're quoting was when offset mortgages had much higher interest rates. Now, they're much more competitive.

I got lucky and did a fee-free offset-tracker BOE + 0.50% with the Newcastle. To be honest, I've just been making capital repayments without fussing too much about offsetting, as it's a good rate anyway but the facility's there when I sell my endowment in the next few weeks.

Sosh

I've got a one account with a large mortgage. So far I've managed to cut over 4 years off my mortgage so I'd definetly recommend it. With a one account though, you have to be very disciplined with money as you can borrow up to your limit any time you want.