Fisrt Diret 5 ye fix - How do you plan to repay your capital?

Cash-Is-King

Hi

Just a quick post to see how the numerous First Direct Fixed Term Offset mortgage holders are planning to repay the capital portion of their mortgages?

The reason I ask is in light of current high percentage AER rates in certain ISA’s and saving accounts, are you utilising these offers or are you simply ‘making up’ the required amount to repay the capital of your mortgage and adding it to your monthly FD mortgage payment?

Personally I am thinking of putting my £280p/m in a good ISA – what are you doing?

Hubbles101

Hi there - im about to start a two year fix with FD 4.75 @£1598 - Im still using the 0% credit on cards and investing it.. The 0% deals are disappearing but this time iv taken a risk and taken £7000 off my mortgage and put it onto a credit card - (virgin 2.98% for 15mths) my plan is to pay off the credit card and then only pay the interest on my FD mortgage.. I feel im saving by not paying the 25year interest in that £7000.. Whats everyone else doing? ps Does anyone know if FD take the mortgage payment at the beginning of the month earning interest or at the end? Kind regards Hub

Cash-Is-King

Firstly, sorry for the rushed subject line of this post - spelling mistakes galore!!

Check out the MSE calculator here - http://www.moneysavingexpert.com/savings/best-cash-isa

This opened my eyes... If I paid £280p/m (above the interest only amount which is required as a minimum) for 20 years into my First Direct 5.29% Offset I would earn £117,828.24. That would cover my £117K mortgage for the remaining 20 years

If I paid £280p/m into a 6.00% tax free cash ISA over the term I would earn £127,584.02. I know interest rates will fluctuate but surely more research and shrewd moving of your savings is what needs to be done.

http://www.leedsbuildingsociety.co.uk/savings/5year_escalator_isa.html

I am now looking at opening the above account. One of the terms to consider… “Transfers out: If, before maturity the 5 Year Fixed Rate Escalator ISA or part of it, is transferred to another ISA manager, the account will be subject to 90 days loss of interest or an equivalent amount on the amount transferred”


Keep the ideas flowing!

££Cash$$

InMyDreams

Cash-Is-King,
If you are looking to put £280p/m away into an ISA, then why not stick with First Direct? They have a 7% regular saver isa, up to £300p/m. It's much more flexible than most regular savers too. http://www.firstdirect.com/savings/regular-saver-isa-overview.shtml
This should give your savings a nice boost to start with... just make sure it's NOT offset against your mortgage! (I don't think it can be.)

I'm still planning what I'm going to be doing. I just snuck in with A&L's 10% ISA which I'm putting the proceeds of a regular saver from last year in to. I will probably open the FD 8% regular saver. (I'm not a tax payer and will be using my ISA allowance for last year's regular saver anyway.) I also have a 7.75% regular saver on the go. I also intend on starting to make some regular payments to my S&S ISA too, but I've been saying that since I opened it last year. I've got to do some number crunching and decide in what proportions I'm going to be saving everywhere.

I have opened a linked savings account for sheer convenience and just because I can, but it's still got a zero balance. Love the fact that I don't have to worry about money staying in my current account as although not market-leading, everything in there will effectively be earning a reasonable rate. For a current account anyway. Other than that I don't really intend on using the offset features, and have gone IO.

InMyDreams

Cash-Is-King wrote: »

This opened my eyes... If I paid £280p/m (above the interest only amount which is required as a minimum) for 20 years into my First Direct 5.29% Offset I would earn £117,828.24. That would cover my £117K mortgage for the remaining 20 years

You'd have to be careful though... you'd have to put in £280 *plus* the interest you're saving. So every month work it out as the interest you pay on your mortgage goes down, your additional payment must go up, keeping the total (interest plus payment) the same... might get confusing to work out when interest rates change. If you just put in your £280/month, enjoying your lower mortgage payments too, you might get a rude shock in 20 years time! :eek: