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Mortgage thoughts

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    #21
    Originally posted by Whorty View Post
    This is how our offset worked with Coventry (I'm sure other lenders do something very similar).

    You get 2 accounts with them - the mortgage and a savers account. The mortgage is variable and you pay say £500 per month (made up number so depends on your mortgage size). This covers the capital portion and interest per month on say a 20 year mortgage.

    Separately you have a saving account with Coventry linked to the mortgage. The balance of the saving account nets with the mortgage each month and you only pay interest on the difference.

    May not be for you but worked perfectly for us. The savings account money is available to you when you need it, but whilst it sits in that account it's effectively 'paying off' your mortgage. **

    ** Edit: and don't forget, if your mortgage interest rate is 4% (for example) your savings are effectively 'earning' 4% income tax free by being offset against your mortgage. With savings rates so poor, that is something worth considering.
    It's actually the perfect setup for those "waiting for the crash / dollar collapse / zombie apocalypse" because whilst you wait with your massive pile of cash, your pay a lot less interest on a mortgage, which in turn builds the pot higher.

    It's also great for IT Contractors to store their war chest / bench money.

    Comment


      #22
      Originally posted by Whorty View Post
      This is how our offset worked with Coventry (I'm sure other lenders do something very similar).

      You get 2 accounts with them - the mortgage and a savers account. The mortgage is variable and you pay say £500 per month (made up number so depends on your mortgage size). This covers the capital portion and interest per month on say a 20 year mortgage.

      Separately you have a saving account with Coventry linked to the mortgage. The balance of the saving account nets with the mortgage each month and you only pay interest on the difference.

      May not be for you but worked perfectly for us. The savings account money is available to you when you need it, but whilst it sits in that account it's effectively 'paying off' your mortgage. **

      ** Edit: and don't forget, if your mortgage interest rate is 4% (for example) your savings are effectively 'earning' 4% income tax free by being offset against your mortgage. With savings rates so poor, that is something worth considering.
      I'm with Coventry too, offset mortgage at I think 1.9% on a 5 year fix.

      I've pretty much kept the same cash balance in the savings account as the value of the mortgage, which means that every month's mortgage payment is a 100% capital repayment

      At one point Cov wrote to me to tell me that I had more cash than the value of my mortgage, and that I would not be earning any interest on it so should consider moving it elsewhere

      I'm thinking of releasing more equity while the market allows me to. It'll just sit in the savings a/c until I find an investment 2 or 3 years later, but it won't be costing me anything due to the offset.

      Comment


        #23
        Originally posted by DimPrawn View Post
        It's also great for IT Contractors to store their war chest / bench money.
        I wonder if there's a way to use Ltd. company capital to "stooze" like this, without washing the money through PAYE/dividends and/or getting in the situation of "illegal use of company funds".

        Comment


          #24
          Originally posted by TheGreenBastard View Post
          I wonder if there's a way to use Ltd. company capital to "stooze" like this, without washing the money through PAYE/dividends and/or getting in the situation of "illegal use of company funds".
          When I did this it was via dividends. That was before they cracked down on divis and imposed the stupid low limits before increased taxation.

          Comment


            #25
            Originally posted by AtW View Post
            Wait till negative rates kick in and they will pay YOU to borrow.
            Don't be so absolutely ******* ridiculous!

            In what sort of ****ed up, screwed, QE driven reality would that EVER happen.














































            Danish bank launches world’s first negative interest rate mortgage | Money | The Guardian

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              #26
              Really low mortgage interest rates are available with a high arrangement fee. Often making them not very good value.
              It’s a crappy marketing trick as the arrangement fees are not included in the APR.
              See You Next Tuesday

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                #27
                Originally posted by DimPrawn View Post
                Don't be so absolutely ******* ridiculous!

                In what sort of ****ed up, screwed, QE driven reality would that EVER happen.


                Danish bank launches world’s first negative interest rate mortgage | Money | The Guardian

                Are you trying to compete with Poopy Pants Scooty in posting old news?

                Don't try to do that. He will drag you down to his level and beat you with his lack of experience

                Comment


                  #28
                  Originally posted by Lance View Post
                  Really low mortgage interest rates are available with a high arrangement fee. Often making them not very good value.
                  It’s a crappy marketing trick as the arrangement fees are not included in the APR.
                  It's a great marketing trick - it works, even when everybody knows about it!

                  Comment


                    #29
                    Originally posted by DimPrawn View Post
                    I cleared my ex wife's mortgage. She says the feeling of wealth and freedom is exhilarating.

                    HTH BIDI
                    she says thanks.

                    Comment


                      #30
                      I've liked the idea of offset mortgages in the past but never found one that was worth it when trackers let you make unlimited offer payments. Our IFA had some misgivings but I'm not sure what they were as it was a few years ago!

                      Anyway, were not in a position to easily leave our lender - Santander - due to current situation starting a new business. Luckily they have decent deals but they don't appear to offer an offset.

                      Sent from my ONEPLUS A6003 using Tapatalk
                      Originally posted by MaryPoppins
                      I'd still not breastfeed a nazi
                      Originally posted by vetran
                      Urine is quite nourishing

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