Offset Mortgage

[kaiser78]

Does anyone have an offset mortgage ? Am due to re-m in May and am looking into these.

Is it possible to make overpayments with these accounts or by nature of offset is overpayment not necessary ? This is the query I cannot seem to find the answer to.
thanks.

[MPwannadecentincome]

By its nature the offset does not need any overpayments, whatever is the net balance of your mortgage and linked savings / current account is the balance from which your mortgage interest is calculated.

When you get a large sum of money (banking bonus?) then simply add it to the savings part of the of linked account, it should immediately reduce your interest calculation.

Offsets are good when you get large irregular payments and possibly these days even better as you won't get any interest on your savings elsewhere!

Beware though that offsets often have a higher interest rate and I don't know about all the other providers but Virgin One's interest rate was actually higher than advertised due to the way that they calculated interest on interest within the month before the interest payment was taken out of the account.

HTH

[Moscow Mule]

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

[Bumfluff]

First Direct offsets are max LTV 80% at the mo, there variable is 3.69% £299 fee, tracker is 3% £799 fee, as a contractor though you will need 2 years accounts, there multiplier is based on average profit over the 2 years x 3 or x3.5 I can't remeber.

[TykeMerc]

First Direct offsets are max LTV 80% at the mo, there variable is 3.69% £299 fee, tracker is 3% £799 fee, as a contractor though you will need 2 years accounts, there multiplier is based on average profit over the 2 years x 3 or x3.5 I can't remeber.

Where?

Personally I like having an offset mortgage as when there's actually an interest rate to pay interest, as a higher rate tax payer it's a simple and perfectly legal way of avoiding the tax on my savings.

[Svalbaard]

My offset is with First Direct and yes you can pretty much do anything you like with the capital repayment as long as you cover the monthly interest payment. Overpay, pay interest only, pay interest + capital and I believe you can take a 3 month total payment holiday at various intervals - although I have not used this facility.

At the moment I am paying interest only which allows me to make any amount of capital repayment I like, and I am currently paying the money I am saving due to low interest rates off of the capital repayment as well as my regular monthly lump so all it's coming down nicely - but the point is that it is my choice - and being a contractor I like the flexibility in that arrangement .

I also like the facility to be able to instantly transfer funds out of the mortgage account so it becomes like an instant remortgage if you ever need a bit extra.

First Direct service is still great also, no automated answering services and they have passed on all recent interest rate cuts to their customers.

[moorfield]

+1

[Lewis]

First Direct service is still great also, no automated answering services and they have passed on all recent interest rate cuts to their customers.

No they haven't. The last two totalling 1% have been completely ignored for people on their SVR. No announcements nothing. There was a message saying "rates under review" online that disapeared and so I assume they have done their review and are no going to adjust their rates but they won't say that, have written to complain to see if I can get an answer. I would rather they said they are ignoring the base rate change than just say nothing.

[Bumfluff]

No they haven't. The last two totalling 1% have been completely ignored for people on their SVR. No announcements nothing. There was a message saying "rates under review" online that disapeared and so I assume they have done their review and are no going to adjust their rates but they won't say that, have written to complain to see if I can get an answer. I would rather they said they are ignoring the base rate change than just say nothing.

Yeah I agree with that First Direct have ignored the last 2 rate cuts on the SVR and said nothing.

They also screwed me over a bit, I had a joint mortgage with them in mine and my ex-partners name, I bought her out as an 'equity buy out', what they were not up front about what they call an 'equity buy out' isnt really an equity buy out, I had to take a brand new mortgage in my own name but they also classed it as a brand new purchase, end result being I had to have all the searches etc done again, as if I had never lived there, even though I live there already, total waste of £600 for the searches and additional legal fees. Then to add further insult I said if they want to do it that way, then its not a remortgage therefore I can take there tracker deal but they said no.

All in all though, First Direct to offer the best rates for off-setting.

[Svalbaard]

Yeah I agree with that First Direct have ignored the last 2 rate cuts on the SVR and said nothing.

They also screwed me over a bit, I had a joint mortgage with them in mine and my ex-partners name, I bought her out as an 'equity buy out', what they were not up front about what they call an 'equity buy out' isnt really an equity buy out, I had to take a brand new mortgage in my own name but they also classed it as a brand new purchase, end result being I had to have all the searches etc done again, as if I had never lived there, even though I live there already, total waste of £600 for the searches and additional legal fees. Then to add further insult I said if they want to do it that way, then its not a remortgage therefore I can take there tracker deal but they said no.

All in all though, First Direct to offer the best rates for off-setting.

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.