Reply to: Interest Rates - can someone explain what...

[scooterscot]

I've got one of those!!

0.49% above base for life with an offset account

I've also got one which is 0.19% above base but that ends in about 18 months

Yes that's the one!

If I'm honest it was pure luck. It is jammy mortgage with jammy bits on it, even the small print is jammy.

[scooterscot]

Yes please do buy up LOTS of new BTL flats. Then when you go bankrupt in 18 months they'll all flood onto the auction market and I'll be able to pick them up at pennies on the pound.

It's a Victorian house - would not touch a new build with a 20' barge poll.

[scooterscot]

can you explain to me exactly what "offset tracker mortgage 0.5% above base rate" actually means..

ok, i understand an offset mortgage compares the balance of savings against the balance of the mortgage owed (lets call this result balance due), but what about the 2nd part? is that you pay interest on the balance due of 0.5% above base rate (currently 1%) i.e you pay 1.5%? am I right in my calcs?

You got it. Offset - anything in the saving's pot will reduce the interest owed, however, the added benefit is that the savings can be used to pay off outstanding mortgage. All the while we pay 0.5% above the base rate until the mortgage is paid off.

[Bear]

Until the mortgage is paid off!!

I spoke to the abbey the other day on this. She told me to guard this product like it were hens teeth, offset tracker 0.5 above the base for the life of the mortgage.

I've got one of those!!

0.49% above base for life with an offset account

I've also got one which is 0.19% above base but that ends in about 18 months

[Cyberman]

¿Does your Ltd company pay into that on your behalf?

No. Mine was paid from salary. I'm not sure of the rules nowadays because I stopped paying in a few years ago. The bottom line is that all payments are tax free.
I think that if your company pays there are fewer restrictions on the annual amount, whereas with salary, unless you have special dispensation from HMRC you can only pay up to 100% per annum, so if you are paying a very low salary it is very restrictive.

[Coalman]

can you explain to me exactly what "offset tracker mortgage 0.5% above base rate" actually means..

ok, i understand an offset mortgage compares the balance of savings against the balance of the mortgage owed (lets call this result balance due), but what about the 2nd part? is that you pay interest on the balance due of 0.5% above base rate (currently 1%) i.e you pay 1.5%? am I right in my calcs?

Yes Chef - you do pay 1.5%.
Currently the best tracker mortgages are about 2% above base rate so not as good.

C&G did a mortgage 1.01% BELOW base rate - i.e. no interest as they capped it a 0% - they should be paying these people interest!.

[KentPhilip]

I'm going to do with the extra money I'm making on my BTL now that the mortgage on my 1% + 0.5 tracker is now actually costing less than half of the rent I'm charging?

Aw capitalism, don't you just love it?

Yes please do buy up LOTS of new BTL flats. Then when you go bankrupt in 18 months they'll all flood onto the auction market and I'll be able to pick them up at pennies on the pound.

[chef]

Until the mortgage is paid off!!

I spoke to the abbey the other day on this. She told me to guard this product like it were hens teeth, offset tracker 0.5 above the base for the life of the mortgage.

can you explain to me exactly what "offset tracker mortgage 0.5% above base rate" actually means..

ok, i understand an offset mortgage compares the balance of savings against the balance of the mortgage owed (lets call this result balance due), but what about the 2nd part? is that you pay interest on the balance due of 0.5% above base rate (currently 1%) i.e you pay 1.5%? am I right in my calcs?

[scooterscot]

Give the tax man half, and use the rest to offset some of your extra large capital losses.

Thanks for the advice but I think I'll give it a miss, like I told the ifa a year or so ago.

I've decided to put the other half (+ ) into the mortgage. Now we're paying twice the mortgage payment every month.

[DimPrawn]

Until the mortgage is paid off!!

I spoke to the abbey the other day on this. She told me to guard this product like it were hens teeth, offset tracker 0.5 above the base for the life of the mortgage.

Then

and

and

HTH

[scooterscot]

How long does the tracker last?

Until the mortgage is paid off!!

I spoke to the abbey the other day on this. She told me to guard this product like it were hens teeth, offset tracker 0.5 above the base for the life of the mortgage.

[Pickle2]

I'm going to do with the extra money I'm making on my BTL now that the mortgage on my 1% + 0.5 tracker is now actually costing less than half of the rent I'm charging?

Aw capitalism, don't you just love it?

Give the tax man half, and use the rest to offset some of your extra large capital losses.

[expat]

My fixed rate mortgage (4.75%) finished last June. What with all the doom and gloom that was going around this time last year I took the advice of a financial advisor and pre booked a new one in advance at a rate of 5.6% fixed for 3 years. The feeling at the time was that inflation was rocketing and interest rates would be going the same way.

Now I'm seriously p****d off!

I also took his advice on a company pension and am slinging as much of my money at it as I can. The pension pot probably has less in now than when I started just over 1 year ago but sooner there than the taxman's pocket.

By the way, this is the financial advisor that the PCG recommends!

How much of his take from your pocket is he giving back?

[wurzel]

Stop that pension and open a SIPP(self-invested personal pension) which have much lower charges and you can manage your own investments. You can transfer the balance of the failing pension into the SIPP. I have one with Hargreaves Lansdowne.

¿Does your Ltd company pay into that on your behalf?

[expat]

Can anyone explain what I'm going to do with the minuscule amount of money I'm saving on my mortgage?

It's a 10-year mortgage, so interest was always less than half the repayment anyway. It's discounted, not tracker: that was all that was available to a contractor newly resident in the UK (I was lucky to get it: presumably now I'd be beyond the pale). So the interest rate hasn't dropped much anyway.

Oh I know: I'll put it towards my new enlarged electricity bill.