Offset mortgage - win-win

Didnt you post all this a week ago?

nope - haven't been posting here for a week

Because other mortgages have better rates?

Eg Nationwide are doing a lifetime fix at BOE base rate + 0.39% (4.89% currently). It's flexible enough for most people to use as a saving account - you can make overpayments (although limited to 500 per month in the first 5 years) and withdraw them whenever you want.

You don't get to offset your current account, but the benefit in doing that is nearly always trivial compared to the mortgage rate.

Yep, it's a shame that Alliance don't do an offset, 'cos then you could move back and be gaining 3.5% per annum with them.

Question: Apart from that you die when you hit the bottom, is there any disadvantage to jumping off a cliff?

Sure, it messes up your hair.

Jim.

of course the interest rate is key - and that's what attracted me to the mortgage in the 1st instance

what i meant was that the vast majority of mortgages have 'similar' interest rates (that's the law of the market place) - so how can they continue to exist against the overwhelming benefits of off-setting - i dont see how they can possibly continue for much longer except in the shadow of the same ignorance of which i was guilty

Over 0.5% difference between FD and Nationwide. That's usually easily enough to beat any offsetting advantage.

- so how can they continue to

They aren't overwhelming, they are trivial. Provided you don't have vast amounts in savings - if you do you should pay down your mortgage with them, if the mortgage is flexible you can withdraw them if you need them.

- i dont see how they

Here's a challenge - work out whether you'd be better or worse off with the Nationwide mortgage and a normal current account.

It seems to me you are still guilty of the same ignorance. You quote a rate of 5.5% which is not too bad, admittedly, but hardly particularly brilliant. You are blinkered by your previous lender's rate of 7% but that was just outrageous and is not a fair basis for comparison.

Generally BTL rates are of the order of a whole % dearer than residential ones, and I'm paying 5.99% on a BTL *with* the flexibility to overpay and reborrow. Therefore you ought to be able to find a non-BTL flexible lender for below 5%. That would then mean that you're paying 10% too much, for the pretty pointless benefit which offsetting offers over and above basic flexibility.

"JethroUK" wrote

I wonder who that was who made two posts using your ID on 2 February then (3 days ago), especially the one at 10:07pm talking about FirstDirect offsets?!

The three day week? I remember that.

here we are, only couple months into my offset mortgage, and without paying one penny more in my monthly repayments i've already paid more than a grand off my mortgage - dont know what Nationwide interest rates are on mortgage or current account, but if you want to supply them i'll calculate the difference - but i have a sneaky feeling it wont be in the same district

LOL. In two months you have saved 1k off your mortgage. Please tell us how you came to this calculation.

it's actually nearer 4 months when i took it out (i got the 2 months from last time i posted) - i didn't calculate it at all (it's not an estimation) - it's on my statement & it's actually more than 1k saved