Help required: Best Offset Tracker Mortgage that can be linked to an ISA

Retired_Minky

My fixed rate ends soon (great).

I'm after a offset tracker mortgage and was wanting something with the following features:

1) ability to make overpayments
2) ability to offset against two ISA's (mine and my wifes - this is so I can keep my savings in a tax free wrapper but also use them to reduce my mortgage).

I'd have to be able to move my existing ISA to the new mortage lender.

Any help greatly appreciated.

silvercar

Finding a good offset deal may give you more money than the benefit of getting an offset that allows ISAs.

Retired_Minky

I like the idea of the offsetting against ISA as it allows me to earn interest tax free on my savings once my mortgage has been paid off.

This works out better for me long term (I think)

medic1978

you would be better off getting the best offset AND the best ISA separately. The separate ISA would have the same effect as having the ISA and offset with the same provider but with the option of better ISA rates and freedom to move ISA to the best rate whenever you want (e.g at the moment FD 5 yr offset is ?5.39% fixed, and with that you could get a 6.5% fixed ISA)

Retired_Minky

The best deal I've currently found is +.74% over base (current rate 5.74%) on a tracker mortgage which can link to an ISA. This has fees just shy of £600.

My current ISA seems to track the base rate exactly and pays 5.25% (although this will drop to 5.00% on the 1st May).

Do you have details of the 6.5% ISA as this does sound like a better option. Who's it with and are they happy for me to transfer my existing ISA over?

medic1978

I managed to get the LTSB 6.5% fixed for a year deal last month although don't think its available now. There are quite a few fixed deals around 6-6.2% e.g Nationwide, BM, YBS etc. As the BoE rate is going downwards i thought it best to fix for a year and then decide next April what to do.

I am going to be doing the same as you in a few months (i.e. remortgage to offset) but i'm sure its MUCH better to keep the ISA separate from offset as then you can get best rate on this and move it whenever you want. Your current ISA at 5-5.2% is not the best deal

Retired_Minky

Thanks for the advice medic1978.

I know I'm probably better of changing and moving the ISA each year but for some bizzare reason I'm still drawn to offsetting against the mortgage.

Need to think about it.

UK007BullDog

ISAs cannot be linked to Offset mortgages. Only regular savings accounts.

You would be benefitting twice with ISA's so not allowed.

minimike2

Woolwich allow you to offset ISAs against your mortgage.

AFIAK they are the only lender that will allow this.

medic1978

IF also allow you to offset ISA against mortgage, but their offset rates aren't very good at the moment...