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offset mortgage help?

the porter Avatar
7y, 6m agoPosted 7 years, 6 months ago
i have just been looking at first direct offset lifetime tracker 2.89% £799 fee 75% borrow up too, can any1 just in laymans terms explain what this entails and how different it is to a normal tracker ta
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the porter Avatar
7y, 6m agoPosted 7 years, 6 months ago
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banned#1
offset usually means you have savings which they offset the interest on, so if they give you a morgage of 90.000 and you have 30.000 in savings, you only ay interest on 60.000 but dont get interest on your 30.000 savings, well i think thats what an offset is
#2
You need to have some savings and/or be really good at managing your money to make it work.

If you haven't got savings the other way you can make it work is if you push any direct debits back to the end of the month and put all your monthly spending on a credit card. NB pay off the credit card in full when it is due. That way your money sits in your account longer, reducing your interest.

I've had one of these types of account for many years now (since they were first available), and it's worked well for me, but you have to really be rigorous in managing & balancing your account.
#3
Offset only really benefits if you manage to save money, as this will help reduce your mortgage payments. With your savings, you can then usually either reduce your monthly payment or reduce your overall length of mortage.
Using Sassie's example, if you have a mortgage of 90k, and have 30k savings, you could either pay a reduced amount every month (which menas you have a little extra being saved every month) or pay the full amount every month, and pay off you mrtage a bit quicker.
banned#4
Just received my mortgage statement.

I have saved £175.43 since November 2006.

I suppose it is better than nothing but it isn't much because I dont have much in my accounts.
banned#5
offset mortgages are pretty useless at the mo, you better wacking any money you have in a high earner account, unless of course your interest on mortgage is high

thread is 11 months old
banned#6
sassie
offset mortgages are pretty useless at the mo, you better wacking any money you have in a high earner account, unless of course your interest on mortgage is high

thread is 11 months old


I know the thread is old but posting what I have saved to help other member's.

I might change to a different mortgage soon.
banned#7
DLM
I know the thread is old but posting what I have saved to help other member's.

I might change to a different mortgage soon.


well depends on what your interest is on it and if you have savings
banned#8
sassie
well depends on what your interest is on it and if you have savings


No savings and interest rate is fairly low on mortgage.
banned#9
DLM
No savings and interest rate is fairly low on mortgage.


if it is fairly low, then you probs better off staying, unless of course you can find a better deal, is it fixed rate?
banned#10
sassie
if it is fairly low, then you probs better off staying, unless of course you can find a better deal, is it fixed rate?


I think it is variable.

The bank I am with always think I will be better off staying on the mortgage I have.
banned#11
DLM
I think it is variable.

The bank I am with always think I will be better off staying on the mortgage I have.


i think all banks say that, just look around to see whats about, although be careful as with costs etc,etc, interest is very low at the mo, so maybe not a good time to move if your interest is low
banned#12
sassie
i think all banks say that, just look around to see whats about, although be careful as with costs etc,etc, interest is very low at the mo, so maybe not a good time to move if your interest is low


I will, thanks sassie :thumbsup:

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