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Discussion Starter · #1 ·
Time has come to look @ the mortgage . been in a great fixed rate for the last 5 years with halifax which was fixed @ 5.12% . I have a option of holding that rate for another year but am keen to see what other offers are out there.

offset , tracker etc etc etc


Advise kindly recieved .

Dave
 

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After being cautious for years I went tracker. And now im paying more. Personally I think the safe option is fixing it. Who knows what another few years could mean for interest rates - its looking iffy. DO you feel lucky?
 

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Discussion Starter · #3 ·
I was very wize with my last deal and have been very happy . Fixed in this market place could be the best option even now . Wondered if anyone had done a offset type as savings all play a part in reducing the interest paided .
 

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5.12% fixed is a pretty good rate, but as always, look out for additional fees that push the total cost of the mortgage up, and tie in periods that mean you have to pay a higher rate for a set period afterwards.
 

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I would defo recommend a fixed rate again, we have just done a fixed rate with the halifax but i work for them ;) :D

Tracker is going to keep going up and up.
 

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evo400 said:
I was very wize with my last deal and have been very happy . Fixed in this market place could be the best option even now . Wondered if anyone had done a offset type as savings all play a part in reducing the interest paided .
If you have a reasonable income coming in (and I guess you do), you may want to consider an offset mortgage.

Basically you are given an 'account' and any monies that are paid into it are 'offset' against the amount outstanding thereby meaning you only pay the interest on what is left. Obviously you dont accrue any interest on the amount you have placed into this account because they are taking it instead - however, the interest they are taking off your mortgage is a damn sight more than what interest you could make if it was in savings account/bank account so its worthwhile looking at.

Example (to keep it simple we'll assume its an interest only mortgage, though in reality most offset if not all are repayment)

House = 300k
You've paid 140k, amount outstanding = 160k

First month, you shove 4k into the offset account.
Amount outstanding = 160k but you pay the interest on 156k.
Second month, you shove in another 5k into the offset account.
Amount outstanding = 160k but you pay the interest on 151k.

I think the minimum amount they will allow is 26k (though thats a figure from one of my mortgage - so its probably a percentage) as they have to make some money I suppose so in reality - with the above example you could put upto 134k into the offset account leaving you to pay the interest on just 26k.

Now someone may say, 'hey! why don't you just pay the mortgage off to the tune of what you are paying into the offset account anyway??'. The answer: you may want to take the offset money back out to use it for something else at any time; no charges and no penalties - thats the beauty of it.

I personally use www.if.com for my offset mortgages.

Hope this helps,

Mark
 

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dave i had an offset mortgage,it was the best move i could of made.since i was earning well at the time i overpaid by quite a lot,because of this i paid my mortgage off about 7 years early.don't know if they do them at a fixed rate,it's something that you will have to look into.the one i was with also had a current account so any money you had in there was deducted from the loan and the interest was based on the remainder.since this is calculated daily it could save you a few pounds by the time the mortgage is paid off.
 

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Well, don't hold us all in suspense. Why is interest only such a good idea?

I've only ever seen it recommended where the applicant is stretched financially (in which case why are they buying a house?) or are buying to let.

Even if it allows you to make overpayments the rates you get make it unattractive and an offset mortgage is usually more flexible.
 

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Discussion Starter · #16 ·
Just looking around IT with there range of offsets and i could knock 6 years from the term apparently . With such a good rate for the next 15 months i guess its going to take some beating with current rates . Offset looks the way tho .

Any other leading edge web based companys out there ???
 

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Discussion Starter · #18 ·
youngsyr said:
...and you keep wallowing in your own smugness. :rolleyes:
Hey !! Don't beat yourself up with Custard !! He is a great guy with a great great sense of humour .

Reading and finding the funnyside is sometimes great fun !!! Custard is a master of making you think !!!
 

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JUST CUSTARD PLC said:
OK, no problem, you keep paying.
you still haven't explained why an interest only mortgage is better,since i haven't got one it doesn't affect me but i'm still curious. think of all the money you could save your fellow mlr members :)
 
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