Tiggs

Now he tells me!

fast bloke

Don't worry - If you include your IDD, FWA, KFI, SOP, ROS and DAN in your post there is fek all they can do



Think carefully before securing business on Scoobynet. Your occupation could be repossesed if you fail to maintain the incomprehensible level of documentation required to sell a buildings and contents policy

Bubba po

LOL.

I'm happy with my arrangements for a man that can't be arsed with the ins and outs of finance, anyway.

Tiggs

and ruin years of building a decent client bank?

Vipa

Amen to that.... Thought I was an IFA not a lumberjack.... bet I kill more trees than a lumberjack though!!!

Compliance inspector.... where..

Brit_in_Japan

Make sure you investigate carefully before paying a lump sum off. Some mortgage lenders actually charge you a fee if you want to pay off lump sums !!

If that is the case with your current lender, it might be better to move the whole mortgage first and then pay off a lump sum with a lender who doesn't charge.

When I got my mortgage I got one with the fewest strings and conditions as I could so I can pay off my mortgage in lumps with no penalty fees.

r32

Pay it off and keep the payments as high as you can afford, then you can retire early.
However its not too difficult to multiply the amount by the number of payments and see roughly what the total amount paid back is .............
Then make your own mind up .........
But I paid mine off ......... thank goodness I can now think of retiring early.

Big Lee

Have a look on here to see how much you can save in interest & how quick you can pay your mortgage off by overpaying X amount per month, on mine by paying £100 per month over I reduced it by 7 years & £11K Find out how much you can pay over without getting stung, on mine I can pay up to £500.01 per month. http://www.fool.co.uk/calculators/mo...yrepayment.asp

RJMS

iTrader: (2)

Surely this is the way to do it - appreciate the rates "might" be a bit higher - but you effectively get tax-free savings as well - I know you can in an ISA - buit all depends on how much you have to save - I think I'm right in saying you can only put £3,000 per year into a Cash ISA. Thinking of "looking after" some of my mums savings as well - saves her paying tax on the interest.

Bodgery

Okay Fast Bloke, I'm willing to learn/be corrected. Here's my logic for you to check out. Where am I going wrong...

Say you need a 100K mortgage, over 23 years. You have 20K savings. Do you:

a) take the mortgage for 100K, stick the 20K in a high interest account;

b) use the 20K to reduce the mortgage and take an 80K mortgage. Save the difference in monthly mortgage payments.

(Assume 5% mortgage over the term, and a 5% net return on the lump sum investment/or monthly savings.)

Doing a), monthly payments would be £610, with 68K interest over the 23 years. Plus the 20K lump sum would grow to 61K in the same period.

Doing b), monthly payments would be £488, with 54K interest over the 23 years. Investing the monthly reduction in mortgage payments each month amounts to 63K over the 23 years.

So...

a) costs you 14K additional interest, offset by 61K savings = 47K balance;
b) 63K balance.

I'm a layman, so someone check over please...in this example, it makes sense to pay 20K off the mortgage. The breakeven point for this example is 7.3% net interest - i.e. that's the point at which the 20K will earn 14K more in interest over 23 years than 122 invested per month (i.e. offsetting the increased interest on the mortgage). 7.3% net interest ain't that easy to average, esp. as this would be a low-medium risk investment one would assume.

Bodgery.

hades

You might find that the best option of all is to pay off the 20%, AND keep paying £610/month. That way you will pay off the whole lot over perhaps 15 years (guessing there), and you can then save/invest the whole £610/month for the final 8 years.

DemonDave

iTrader: (13)

Don't forget when you offset you are also getting it tax free. ie because you are not making money the tax man aint taking it off you. That adds to the amount you knock off your mortage. (oops RJMS said that !!!)

I would say it would depend on whether you need the £20k to hand ... if not clear it off the mortage. If you need a rainy day fund then offset it (or part or it) the supplement it with your current account and 0% credit cards to lower or remove the interest.

Dave

Currently on offset with some savings + credit cards @ 0% = 5 months of no interest at all on my mortage = rough saving of £1500 = £300 per month

jjones

http://www.jeacle.ie/mortgage/

03-CTR

curious as i've just taken out an offset. how are you doing that exactly ??

cheers

DemonDave

iTrader: (13)

Not exact figures but you will get the idea

Debit
mortage = £100000

Credit
Current Account Avg = £5000
Savings = £25000
Credit Card 1 = £10000
Credit Card 2 = £15000
Credit Card 3 = £15000
Credit Card 4 = £2000
Credit Card 5 = £8000
Credit Card 6 = £10000
Credit Card 7 = £15000

Each credit card balance has been transferred to linked offset account, paying min off each month, just need to beware of when the 0% finishes and be ready with some more cards

Total Credit = £105000

May sound link hassle but when you have it sorted its easy called stoozing ! see http://www.gemnet.freeserve.co.uk/stooz_intro.htm I have just taken it the high value level.

and http://www.moneysavingexpert.com/

Horico

if you go to see an IFA and they charge you for their work, please don't do it.

Each, and every time I've talked to these guys, I've managed to find either the same deal or a better deal myself on the internet. Just because they can find x thousand products on their 'systems' doesn't mean squat as only a few will meet 'your' criteria.

It's a case of do you want a fixed mortgage and how long for? A variable? Discount etc etc.

If you don't know about mortgages or what financial products are out there then you may need to find out yourself, or get some impartial advice on where to look for it.

The fact that you're asking the question suggests you're maybe wanting to do this.

It's all a matter of looking at what the choices you make mean in numbers terms. Many have said go the offset route but as numbers specific to you haven;t been included, how can you be sure that this is the best way?

It's all about the numbers.

While I do work for a bank, I'm not saying that my word is gospel, or touting for business but It annoys me how the great financial institutions like to squeeze us for every penny....

If you want to send me some numbers and your thoughts, I can have a look for you. Not going to promise the earth though as so far you haven't been specific.

Horico

Some good stuff, but some is woefully biased and sensationalises some aspects or 'tarting' for a good rate.

Going for the dramatic explanation rather than the straightforward one....

was good to read though as the ideas are sound enough.

03-CTR

thanks !!

never thought of taking it to that level but it makes perfect sense. the only thing you need to watch i suppose is that the 0% offer covers cash withdrawls and that you spread the applications on the cards (or woe betide your credit history). otherwise a stonking idea !!

DemonDave

iTrader: (13)

use the free trial on www.creditexpert.co.uk to keep an eye on your credit history.

and some cards will allow you to transfer to your account for free. Get one of these and keep it, then do a card to card transfer to this card and then off to your bank account

fast bloke

I am assuming that you work on a voluntary basis for the bank? - or are you just a short sighted ******? - You want paid, we want paid - what is the difference?

Tiggs

MarkO

Why not get a 50k mortgage with over-payment/underpayment options. Then stick the savings into it. That way you'll have the available facility to take out the savings again if you need to use them, but you'll also be reducing the capital upon which you're paying interest by a whopping £20k, which will also save you money.

Best of both worlds.