What is your current mortgage rate...

bunking_off

nrsql wrote: »

Did you remember to take into account the 6%-7% before tax that you would have got on the savings if you had a lower rate mortgage?

You've lost me a bit. This is a One Account mentality, but I don't have savings. I'm "ahead" of my plan, but my mortgage outstrips the amount I'm ahead by, so I'm in net debt. The same as anyone who has any mortgage but also "savings" doesn't have savings, they have net debt (although I absolutely agree that at times it can make sense to hold savings rather than paying down mortgage). What we do have is "excess income", which we choose whether to put into a savings account or pay down the mortgage...but in my (perhaps warped) mind it doesn't represent savings until we're past that magic zero net debt figure.

The money I've got stoozed is some on a 0% for 12 months, some on 3.9% LoB. I've used up my ISA limit (only get 0.1% more than OA for that, but it preserves my annual allowance), pay 40% tax, so it doesn't make sense for me to put money into savings accounts...on a 6% paying account I'd only yield 3.6%. Only place I put excess money other than the OA is company shares...scheme allows me to buy these from gross salary, plus company matches 1:1 = one way bet, even if the share price drops (well, price would need to drop to 30% of current for it to go into loss).

Happy to say my outstanding debt has one less zero than your examples

Jennifer_Jane

jamtart6 wrote: »

I am mortgage free......because I am a FTB! so i have no idea about rates...yet..can I be really thick and ask why some would go for a rate of 7% when majority are on 5%?? Sorry for the dumb question, I have no clue!

Can't see that anyone's answered this, but for me.... in order to be able to afford a mortgage in the first place, in 2000 at age 53, I took an interest-only very long-term (till I was 90 or something) mortgage of £60000 on a fixed rate for first two years. After the two years, I remortgaged on the same terms with another provider at a reduced rate. I now have come off the fixed rate and therefore mortgage has increased. As I now only owe £19700, however, it is not worth the fees to remortgage. As soon as stock markets improve and other money becomes available, I will pay off the rest of the mortgage.

Currently my interest payment is £120 per month, so am taking a chance on the markets improving at a faster rate than the 7.2% I'm paying on the mortgage interest rate. Won't leave it too long, of course! Just gathering my resources together.



Regards
Jen
x

sooty&sweep

Hi

We're on a BOE base rate tracker + 0.18%. Its a lifetime deal with the Nationwide and we can overpay upto £500 per month so we're paying £100 extra at the moment.

We're tied in for five years and then we can move penalty free.

Girl_least_likely_to

We're nearly 3 years into a 4.19% 10 year deal with Nationwide. I was pregnant with our first (and only yet) DD, knew I didn't want to go back to work after having baby and husband is self employed. We didn't want the hassle of having to reapply every few years and more importantly having to proove our earnings when i wouldn't be working. Our repayments are £600 a month but otherwise we live well within our means despite me not earning. We are saving in ISA's rather than overpaying the mortgage because of the interest rate.

nrsql

bunking_off wrote: »

You've lost me a bit. This is a One Account mentality, but I don't have savings. I'm "ahead" of my plan, but my mortgage outstrips the amount I'm ahead by, so I'm in net debt. The same as anyone who has any mortgage but also "savings" doesn't have savings, they have net debt (although I absolutely agree that at times it can make sense to hold savings rather than paying down mortgage). What we do have is "excess income", which we choose whether to put into a savings account or pay down the mortgage...but in my (perhaps warped) mind it doesn't represent savings until we're past that magic zero net debt figure.

The money I've got stoozed is some on a 0% for 12 months, some on 3.9% LoB. I've used up my ISA limit (only get 0.1% more than OA for that, but it preserves my annual allowance), pay 40% tax, so it doesn't make sense for me to put money into savings accounts...on a 6% paying account I'd only yield 3.6%. Only place I put excess money other than the OA is company shares...scheme allows me to buy these from gross salary, plus company matches 1:1 = one way bet, even if the share price drops (well, price would need to drop to 30% of current for it to go into loss).

Happy to say my outstanding debt has one less zero than your examples

When you calculated the mortgage rate did you just say this is the total mortgage amount and this is the interest I am paying (including offset) so this is the effective rate?
If so then you are assuming that if you didn't have the offset then you wouldn't have received interest on the money - would have left it in your current account maybe.
Most people don't leave large amounts in the urrent account but move it to esavers or higher interest accounts and that lost interest on savings should be taken into account when calculating the benefit of the one account.

Most valuations ignore this and try to con you that anything you put in the offset account is getting an interest rate equivalent to the mortgage rate due to the product - it's not, it's getting the mortgage rate minus your savings account interest rate after tax.
Combine that with any overpayments you might have made on another product and you will find that it's very difficult to see a benefit from the one account even though it looks as though you will.

bunking_off

nrsql wrote: »

When you calculated the mortgage rate did you just say this is the total mortgage amount and this is the interest I am paying (including offset) so this is the effective rate?

Ah, no. I took my net debt (mortgage minus savings in your terms, although that concept doesn't make sense in the mindset of a One Account as we don't have savings, just a big debt). I'm not even sure what my total mortgage balance would be in absence of overpaying...

aliwali

Hi
Alas our 4.45% fixed deal ends this month. We have now arranged our remortgage through HSBC at BoE +0.48% which is a lot more than we are paying now, but seems like a great deal in the current climate. Would have loved to have fixed again but the rates were just not competitive enough with the fees added in.
Alison

iieee

We're just coming to the end of our second 2 year fixed rate of 5.19%. As of the beginning of July we'll be on 5.69% fixed for 5 years. It was the best rate we could get without paying massive fees, and even that rate was withdrawn just after we got our agreement in principle - we got there just in time! _pale_

moneypooh

C & G BoE lifetime tracker + 0.49%. Had this for two years and no limit on overpayment. As we were already with C & G (endowment:eek: ) we weren't charged fees. We didn't qualify for the slightly better rate by £1000 too little earnings at the time:(

After having a nightmare with the endowment, it's nice to know the mortgage gets smaller every month:D

plzhelpmesave!

we're with west bromwich. took out a ten year fixed at 5.39% in feb this year when other deal ended - 4.99%.