How to live without savings?

Claypot

Its possible to do this now with most flexible mortgages remember rather than offset mortgages which tend to charge a higher rate. If you use this tactic with an offset mortage you could end up costing yourself more money in the long run if you keep borrowing back, offset mortgages are superb as long as your not tempted to borrow back from the overpayment too much..

gil13

with regards to the offest i think he was meaning that he has savings offset against the mortgage in a linked savings account which whilst not earning creadit interest remains a tax efficient way to hold savings - or even that rainy day fund. this is different to capital repayments which whilst could be borrowed back are best not. as indicated a combination of approaches are probably best whilst using a non-tax paying partner (e.g when starting a family) to chase better savings returns in thier name.

StuartGMC

gil13 wrote: »

with regards to the offest i think he was meaning that he has savings offset against the mortgage in a linked savings account which whilst not earning creadit interest remains a tax efficient way to hold savings - or even that rainy day fund. this is different to capital repayments which whilst could be borrowed back are best not. as indicated a combination of approaches are probably best whilst using a non-tax paying partner (e.g when starting a family) to chase better savings returns in thier name.

Gil - spot on we overpay plus we hold the emergency money and additional savings offsetting the mortgage; we have a NatWest offset, so current and savings account offset. In reality neither receive interest payments so you could argue no need to split the two, but, the simple fact that the savings money is shown separately means you aim to add to it and not withdraw (except for the planned holidays etc). The current account moves up and down through the month. Thus the regular online check of the numbers drives you to not withdraw money and grow the savings.