Please settle this arguement

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Geoff13 wrote: »

Be careful on offsetting the full amount, as some lenders will close your mortgage once you get to this stage - often without checking with you first!!!

Thanks for this, will check this out with my mortgage company to see what they say.

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Rabiddog wrote: »

A mortgage is secured against your home. So there is, however slim, the chance that you wont be able repay and your home gets repossessed. That wouldn't happen with a credit card or non-secured loan.

This backs up my arguement of paying the thing off over the next three years. I always think there is bound to be a cheap loan out there somewhere if we need it;)

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tonyE1 wrote: »

A mortgage is undoubtedly the cheapest form of loan, but if you are talking about small loans there are so many around which are only 1 or 2% over typical mortgage rates such that in absolute terms it makes very little difference.

Yes this is where I'm coming from..... I'd rather have the house paid off and have the security of a roof over our heads especially in today's climate. Unlike hubby I'd rather go on a few holidays than add an extention to the house.... life is just too short and we should enjoy it now rather than trying to make the house bigger:D

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Thanks so much to all who replied. It's always good to hear opinions of others before making a decision.

KiKi

I think the question of 'who's right' depends on what you're trying to achieve!

If you want to build an extension, and you add it to your mortgage over a period of 10 years, you may well end up paying more than if you took a loan over a much shorter period. A mortgage has a much lower interest rate, of course (and therefore seen as 'the cheapest'), but then if you're paying that interest rate every month for the next 25 years, it doesn't necessarily pay off.

If you *do* overpay it and therefore intend to pay it more quickly (and the offset pot you have will help that) then it may be the better deal, but you'd need to do the figures.

I agree with others - get it down as far as you can, keep a *nominal* amount in there - and make sure that you don't have in the offset pot the same amount as your outstanding mortgage is worth, or you might find, as someone else said, that the bank takes your money and pays off your mortgage without your permission!

My plan is exactly that: to get almost equal savings to mortgage remaining, pay *most* of it off, and keep a few nominal pounds on the mortgage so that I can access it as an emergency cash situation!

Tell your husband he's right that it's cheap, but only if you pay it off more quickly by overpaying. And tell him when he's at his most relaxed - like, almost asleep - and then you'll still feel you've won.

KiKi

Newbird

KiKi wrote: »

you might find, as someone else said, that the bank takes your money and pays off your mortgage without your permission!KiKi

This is alarming! :eek:
How can a lender decide for you what to do with your offset pot without your permission?
How would they know what the offset pot was allocated for in your personal finance plan?
I have savings offset that are not towards the mortgage, like most others will have. Stoozers would be in for a shock when it came to card payback time no?

Surely its not in the lenders interest anyway to end your mortgage for you if they can keep you paying further monthly payments?

BTW my new adopted puddy cat is called Kiki

TighterThanTwoCoatsOfPain

KiKi wrote: »

...you might find, as someone else said, that the bank takes your money and pays off your mortgage without your permission!

The only scenario this would happen as far as I can see is if you default on your mortgage, the company reserves the right to collect from linked accounts..

I have just (almost!) switched to First Direct, and one of their clauses stated something similar i believe... sure it also said something along the lines of the HSBC group holding my house as security for any debts (current and future) I have with the group too.

Wouldnt fret too much, you wont just wake up one day and find they have nabbed your cash.. only an issue if you stop stumping up the readies..