Yorkshire BS Offset Mortgage 4.74% 5yr FIXED ?!

Ching_Ching

Hi,

My current mortgage deal finishes in November and I'm looking out for the way that 5/10 year fixed rates are going in the next few weeks before making an application.

I'd like the security of a fixed rate because I have a large-ish mortgage and I don't want to be doing this research every 2 years and shelling out £££ in fees to hop from one deal to another.

I gather that a couple of rate drops have already been factored in to the current deals and they may not get any better this year.

I'm interested in taking out the Yorkshire Building Society 5 year Fixed Rate to 30 Sep 2010 at 4.74%. This also has an Offset Savings/Current Account facility so that salary, direct debits and savings can go through it to Offset the mortgage balance.

You get a 0.60% of loan rebate ( or free legals and free valuation ) which makes it fee-free.

http://www.ybs.co.uk/mortgages/current_products/products/offset_fixed_300910.jsp

Even the variable rate at the end is a tracker of BOE base rate + 0.75%, rather than the SVR.

This deal seems almost too good to be true – is there a catch ?

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Also, I'm thinking of borrowing the maximum I can and offsetting the surplus I don't 'need'

e.g.
House value = £250,000
Mortgage required = £120,000
Savings level (minimal due to making regular overpayments on my current mortgage ) = £1,000
Ability to borrow, say, £160,000 ( Higher rate tax payer )

Is there any reason why I shouldn't borrow the max £160,000 and stash the surplus £40,000 plus my own savings of £1,000 in the Offset Savings Account and treat it as a £120,000 mortgage with £41,000 emergency/home improvement cash 'reserve' to hand ?

I'm a rate tart so the alternative is borrowing the £120,000 mortgage from Bank Y, having savings at Bank X, Current Account at Bank W and any future loan for major repairs at Bank Z……

Other alternatives I'm looking at are:
10 Year Fixed Rate at 4.74% (YBS)
5 Year Fixed Rate at 4.45% (Portman) or 4.49% (A & L, Scarborough, YBS)



Thanks for reading, looking forward to your comments.

Ching_Ching

Ching_Ching

Hi,

I think I'm going to take the plunge and go for this YBS 5-year-fix at 4.74% mortgage since it may be withdrawn in the next few days in light of last week's Portman 5-year-fix % rate increase.

- I'll end up kicking myself if it disappears.

Any reason why I should be looking at something else ?
I have this nagging feeling that I am missing a downside to the deal and I can't see it!

Thanks
Ching_Ching

Froggitt

Go for it.....its a goodun

dadrock

Check out the mortgage search on https://www.moneyfacts.co.uk and select the options to show you the true cost over 5 years.

This will list the YBS deal amongst the others that it knows about.

I entered my own circumstances to see how it appeared. There was little in it between their best and YBS although YBS came in on page 3.

Froggitt

Presumably you compared it with other fixed rate deals.....witht he offset facility as well, its a good deal.......the additional cost of offsets seems to be on their way out

Ching_Ching

Thanks Froggitt and Dadrock for your encouraging replies, it's nice to have a couple of second opinions.

I can sleep easier now!

:whistle:

Ching_Ching