Offset options (Mortgage)
Discussion
Scenario.
Currently have offset with Barclays 3.79% ie base +3.29%.
However Barclays now have two new Offset mortgages one which is 2.99% (base +2.49%) with an arrangement fee of £1499 or anoter which is 3.09% (base plus 2.59%) with an arrangement fee of £999.
Now like for like in year one incl arrangement fee the 3.09% is cheaper than current option while the 2.99% is more than as is.
It takes quite roughly 3.5 years before the 2.99% option in total in cheaper than the 3.09%.
Therefore is it me or is this a headline grabbing rate and people miss the fact it takes many years to recover the additional arrangemnt fee - plus within that timescale who knows what other options wll be available.
Anyway Ive searched online and barclays is second overall in the ranking of costs only First direct are cheaper but when you add in the early redemption fees and other supplier valuation fees its a huge amount of hassle for 2 cents of bugger all.
Actually rethinking - I believe I have a 1% of the outstanding balance up to 3 years after taking it out (had it nearly two years).
Just redone the maths and it takes nearly three years before the cheaper rate plus opening fee plus early redemption charge make it cheaper.
So idea in the bin for now.
Currently have offset with Barclays 3.79% ie base +3.29%.
However Barclays now have two new Offset mortgages one which is 2.99% (base +2.49%) with an arrangement fee of £1499 or anoter which is 3.09% (base plus 2.59%) with an arrangement fee of £999.
Now like for like in year one incl arrangement fee the 3.09% is cheaper than current option while the 2.99% is more than as is.
It takes quite roughly 3.5 years before the 2.99% option in total in cheaper than the 3.09%.
Therefore is it me or is this a headline grabbing rate and people miss the fact it takes many years to recover the additional arrangemnt fee - plus within that timescale who knows what other options wll be available.
Anyway Ive searched online and barclays is second overall in the ranking of costs only First direct are cheaper but when you add in the early redemption fees and other supplier valuation fees its a huge amount of hassle for 2 cents of bugger all.
Actually rethinking - I believe I have a 1% of the outstanding balance up to 3 years after taking it out (had it nearly two years).
Just redone the maths and it takes nearly three years before the cheaper rate plus opening fee plus early redemption charge make it cheaper.
So idea in the bin for now.
It doesn't sound like it's worth you switching, First Direct are a bit cheaper 2.69% on 65% LTV but more expensive when you take into account your early redemption fees. On a side note I would recommend an offset mortgage to anyone. It really concentrates your mind on getting it paid off when you can see the capital reducing and the direct effect that has the interest you pay each month. Just make sure it doesn't turn you into a non-holidaying hermit no point being the richest corpse in the graveyard!
Im a big supporter of Offset mortgages - especially if the rates offered are competative (which these are).
In 2 years still have not yet got round to moving my current account into the it.... But I do tfr during the month but am missing out on some interest saving.
All cash ISA's are in - - its a shame S&Shares ISA's are not permitted to be linked.
Frankly Id put everything into the same pot (bar possibly £1k into a different bank incase I lose my cards etc).
In 2 years still have not yet got round to moving my current account into the it.... But I do tfr during the month but am missing out on some interest saving.
All cash ISA's are in - - its a shame S&Shares ISA's are not permitted to be linked.
Frankly Id put everything into the same pot (bar possibly £1k into a different bank incase I lose my cards etc).
Welshbeef said:
Im a big supporter of Offset mortgages - especially if the rates offered are competative (which these are).
In 2 years still have not yet got round to moving my current account into the it.... But I do tfr during the month but am missing out on some interest saving.
All cash ISA's are in - - its a shame S&Shares ISA's are not permitted to be linked.
Frankly Id put everything into the same pot (bar possibly £1k into a different bank incase I lose my cards etc).
That looks like another advantage over First Direct from what I've read Cash ISA's can't be offset against the mortgage although other types of savings accounts can.In 2 years still have not yet got round to moving my current account into the it.... But I do tfr during the month but am missing out on some interest saving.
All cash ISA's are in - - its a shame S&Shares ISA's are not permitted to be linked.
Frankly Id put everything into the same pot (bar possibly £1k into a different bank incase I lose my cards etc).
Not worth moving for those numbers.
How times change. I've arranged two offset mortgages with Barclays (well The Woolwich in actual fact), the first (2004) was a re-mortgage at BR +0.99%, no arrangement fee and they paid the legal expenses, the second (2006) was on a purchase at BR +0.75% with £200 arrangement fee.
Being able to offset ISAs is a definite advantage of the Barclays product as not all allow you to do this.
How times change. I've arranged two offset mortgages with Barclays (well The Woolwich in actual fact), the first (2004) was a re-mortgage at BR +0.99%, no arrangement fee and they paid the legal expenses, the second (2006) was on a purchase at BR +0.75% with £200 arrangement fee.
Being able to offset ISAs is a definite advantage of the Barclays product as not all allow you to do this.
5pen said:
Not worth moving for those numbers.
How times change. I've arranged two offset mortgages with Barclays (well The Woolwich in actual fact), the first (2004) was a re-mortgage at BR +0.99%, no arrangement fee and they paid the legal expenses, the second (2006) was on a purchase at BR +0.75% with £200 arrangement fee.
Being able to offset ISAs is a definite advantage of the Barclays product as not all allow you to do this.
Very true.How times change. I've arranged two offset mortgages with Barclays (well The Woolwich in actual fact), the first (2004) was a re-mortgage at BR +0.99%, no arrangement fee and they paid the legal expenses, the second (2006) was on a purchase at BR +0.75% with £200 arrangement fee.
Being able to offset ISAs is a definite advantage of the Barclays product as not all allow you to do this.
If it didnt allow ISA's I'd not use my allowence instead this way I can use our allowence every year into the offset and then once fully offset ie zero mortgage interest we can then pay off pure capital and have ISA's outside of the offset.
[quote=Bluequay]It doesn't sound like it's worth you switching, First Direct are a bit cheaper 2.69% on 65% LTV quote]
I see 2.79% on here
http://mortgages.firstdirect.com/mortgage-products...
am I looking at wrong bit?
I see 2.79% on here
http://mortgages.firstdirect.com/mortgage-products...
am I looking at wrong bit?
NoelWatson said:
bluequay said:
It doesn't sound like it's worth you switching, First Direct are a bit cheaper 2.69% on 65% LTV quote
I see 2.79% on herehttp://mortgages.firstdirect.com/mortgage-products...
am I looking at wrong bit?
http://mortgages.firstdirect.com/mortgage-products...
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