Offsets are not offset

surreysaver

silvercar wrote: »

Your saying that as a fact, when even the FSCS haven't gone that far. If only 35k of your savings are protected and the lender doesn't include an offsetting clause in your mortgage agreement it could be that you would still owe 50-35k=15k.

Nothing is certain.

This situation would be nothing to do with the FSCS, as you are not owed anything you are not due any compensation. Whether this changes in the future and savings are protected when you also have debts with the same company is another matter. But if a company goes bust - any company, not just financial institutions - if you owe them more than they owe you, you are in the better postion and are not going to pay them money which you have already paid! There is no reason why this would be any different with a bank, just because they are a bank.

MuddledOfMiddlesex

I don't know whether links are allowed on here, but I do think it's relevant, especially the comments underneath the Fool article here:

http://www.fool.co.uk/news/property-home/mortgages/2008/04/11/be-careful-with-offset-mortgages.aspx

I was very anxious about this, and have posted elsewhere, but I finally spoke to someone at FD who assured me that even though our joint account with most of the offset cash is a joint savings account, our money would be protected and only the outstanding debt - i.e. z where x (the mortgage amount) minus y (the total amount offset in all offset accounts) = z, would be taken over by a rescuing bank/government.

Now, maybe he was wrong, but he assured me he had checked...horrible times, though, and I wonder if MSE might be able to do a full article on this, to get statements from the major offset players i.e. IF/FD/One.

magicdogsbrain

Phew!!!! :-)