Offset Mortgage

[Bumfluff]

Perhaps you need to get onto an FD Offset then then as I have had rate cut notices with a week and a half of the last 3 announced by the BOE.

And I doubt very much that you got "screwed over" by anyone. What is more likely is that you probabaly failed to : listen to the advisor/ read the terms or conditions and / or small-print properly, or decided to leap before looking*.

* - delete as appropriate until you find the one where I hit the nail on the head.

No I did listen, the problem is FD are the only lender to do equity buy outs in this way no other lender does it this way, even the guy at FD admitted they do because its 'easy for them to process'. I was only aware of it when I got the formal mortgage offer, but by that point I was already to far down the line to walk away.

[Lewis]

Perhaps you need to get onto an FD Offset then then as I have had rate cut notices with a week and a half of the last 3 announced by the BOE.

Like I said. Not if you are on their Standard Variable Rate Offset. When I remortgaged my FD offset about three years ago they removed the clause that said "rate would not be more than 1% above BOE base rate". So anyone who has an FD offset which is not a tracker or fixed rate has NOT had a rate cut. You either have a mortgage older than around 3 years or you are on a tracker. Their SVR is currently 3.69% and since it was set at that there has been a further 1% drop in BOE base rate.

[Waldorf]

I have an offset with Standard Life and they have not fully passed on the rate cuts

I will try and remortgage when I get around to it

[Little'Old Me]

Tracker with no penalties

I have a tracker with no penalties with BoS. I say that rather than the old HBOS, because within HBOS there were several different lenders! Its now part of Lloyds, but my paperwork still comes from BoS.

Its not the cheapest (0.95 over base), but when I checked the T&C's they must follow the Base Rate within 30 days. So far it has changed on the 1st of the month following any rate change.

The reason I choose this mortgage (I was very specific) was I wanted no penalties, so I can overpay the mortgage if I want, when I want. As long as I leave at least £1,000 owed, it continues. ) I did once have enough money to pay it off, but I knew I would need a big chunk of it again, so rather than pay it off and re mortgage, I left £1,000. My repayments dropped to a really silly amount!

It came with a cheque book, so if I need the money back at any time I can have it. I don't bother with emergency savings accounts - my mortgage is my emergency savings account - in fact any unspent money at the end of the month get transferred across automatically !

[GreenerGrass]

Another here on the First Direct offset SVR. I was hoping they would at least pass on one of the last two rate cuts in order to reclaim having the lowest SVR of everyone. Fingers crossed we'll hear something in the next few weeks (by which time the base rate will be 0.5%...)

On the plus side I can't fault the customer service on the phone.

I am surprised their fixed rates are still so high.

[FarmerPalmer]

I have a Woolwich Offset Tracker (BoE Base Rate + 1.09%) with Barclays, arranged through Contractor Money.

I have a Mortgage Account, Current Account and Deposit Account.
Both my Current Account & Deposit Account are offset.

I pay a mortgage repayment assuming no offsets (plus some).
Every month they deduct interest from my mortgage account based on
Mortgage Balance - (Current Account Balance + Deposit Account Balance)

So I effectively get (BoE Base Rate + 1.09%) tax free on all my monies

If you have a reasonable amount of cash on deposit (essential in these turbulent times) then its a worthwhile transition.

[Olly]

So I effectively get (BoE Base Rate + 1.09%) tax free on all my monies

on the face of it that sounds like the most warped piece of financial logic I've heard in a while

[DaveB]

on the face of it that sounds like the most warped piece of financial logic I've heard in a while

It sounds warped but it's true.

Taking the current FD offset offer as an example, as a base rate tax payer you would need to get 3.6% ( or there abouts ) to earn an equivalent amount in interest on your savings as is being deducted from your mortgage interest payments. If you are paying higher rate tax it goes up to 4.92%.

[FarmerPalmer]

on the face of it that sounds like the most warped piece of financial logic I've heard in a while

Best current instant access rate is 3.5%:

http://www.moneysupermarket.com/savings/

3.5% gross - 40% tax = 2.1% net

v

(1% BoE + 1.09%) = 2.09%

OK So I'd be slightly better off - but how long will egg be paying 3.5% for ?
and then I'd have the 3 days where money is lost whilst it goes into that void between accounts whenever I transfer any money.

... so on the face of it ... I like my offset plan

[ratewhore]

You'll also be looking at pretty low LTVs at the moment (according to those nice folks at contractormoney.com)

What LTV's are available through contractormoney at the mo?