Offset Mortgage With The Woolwich

rizwany84

HELP!!!

Details:

Purchase Price: £103,000.00
Mortgage: £95,595.00 (including £595 Fee)
Deposit: £8,000.00
Term: 25 years
Mortgage Type: OFFSET LIFETIME TRACKER (BoE+ 0.48%), currently 5.48%
Monthly Repayment: £614.75
Interest: Calculated Daily

I have approximately £40,000 in my current account (of which £20,000 is my fathers). My interest is calculated daily and I receive I statement every month detailing everything that I need to know. I am very happy with the mortgage.

Is it worth me borrowing £5000 from my credit card at 0% until May 2009? The charge for borrowing this is 3% transfer fee, which is £150. Obviously this money would go into the account which is offset again my mortgage. Just to let you know as well my wages go into this account, approx £1000 every month. I use another credit card for all purchases and pay off the balance in full a couple of days before it is due.

I can save money in two ways: 1. I can reduce my term or 2. I can reduce my monthly repayments. I have chosen number 1, so effectively I am overpaying each month.


Thanks in advance for any comments and suggestions.

Rizwan

minimike2

You would save about £140 if you did, depending on what base rate does in that time. I suppose its better than paying an exra £140 if you can be bothered with the hassle of doing it!

rizwany84

Could I ask how you worked that out (as if you were doing it on a calcultor)?

Thanks

minimike2

I did the interest chargeable on the £5000 over the 13 month period at the current rate minus the BTF ((5.48x5000 %) / 12) x13) - 150 = £146.83

*edit*

Just to point out its a really rough way of working it out.....

rizwany84

Would i use the same formula to work out how much the money in my linked curent account saves me:

((interst rate * amount %) / number of months in a year) * number of months linked for) =

((5.48 * 40000%) /12 * 300) = £54,800

If this is corrrect, please could you explain why i have to put in the current interest rate into the formula?

Thanks again.

minimike2

Well its hard with the current account, you need to work out the average balance that offsets.

Woolwich actually have an offset calculator on thier website, so if you want me to run any figures through it for you i can do.

maryjane01

Is this rate through a broker? All I can see on their website is base rate +0.74.

I just paid the booking fee last night for the FD 10 year fixed offset at 5.49, but I am not due to remortgage till the 1st of September (A £299 insurance policy I have bought on the rate as I look at it!). Rates look like they will be heading south but I really want an offset account (Other half is self employed), and FD don't do an offset account on their tracker mortgage. Their tracker rate is pretty good at Base +0.34.

Does anybody know what other good offset tracker rates are out there?

Just noticed for the best woolwich rate you need 60%ltv, which I dno't have so it looks like it will not be the deal for me!

rizwany84

I actually took at this mortgage direct with The Woolwich in September 2007 but the houuse purchase never got completed till Februray 2008 (I was in a chain). They were offering 95%LTV with an Offset lifetime tracker, +0.48%. I can link up to four current accounts as well. Just shows thats the banks have tightened up their lending critria and charges due to 'the credit crunch'.

rizwany84

Minimike2:

I have run my figures through The Wolwich offset calculator. I was just wandering what the actual formula (calculations) was?