I have just remortgaged & went for a current account mortgage, basically you run a current account alongside your mortgage, interest is calculated daily & any money you have in your account is offset against your interest, this should help to reduce the number of years you have to pay.
If you can pay most of your bills on plastic and then pay off at the end of the month avoiding interest on your card the money will sit in your account helping to reduce your mortgage term.
Also if you are self employed & put money aside for tax or vat, with the small amount of interest you get on deposit/instant access acounts you may prefer to use this against your mortgage also.
This type of Mortgage requires self disipline so if you go down this route be careful, we all know how easy it is to end up with big plastic bills
Try the Virgin one account or Halifax IF account. Should you select Halifax try also "The St James Place Bank" on 0845 602 6200, They are owned by Halifax (used to be Rothchilds) but are aiming at higher earners, I dont know if this is you! They offer the same mortgage account as Halifax IF but 1/4 % less on interest
& discounted for first 3 Months , also they pay all the fees

 

whos got a spead sheet????

work out a typical mortage of say £150k?

charge it SVR but allow for £5k a month for your current account surlpus...

then compare against a good fix/ discount without the benifit of surplus- it would seem you need a healthy surplus to benifit?

 

'Current account surplus' -- what's that?

Is the interest not calculated daily on these, so (for arguments sake and to keep the numbers simple):

On a mortgage of 100k, with someone taking home 2k a month, which is spent uniformly across the month:

You get paid at the start of the month. You now owe only 98k
In the middle of the month you owe 99k
At the end of the month you owe 100k.

Interest is calculated daily, which in this example averages out to the same as the interest on 99k. So even if you spend all that you earn each month, you end up paying interest on a smaller mortgage?

 

ok, so do you want 99K at SVR or 100k at good fix?

i reckon the surplus needs to be healthy! to make it work.

tax fund etc as mentioned make sense but 2k per month pay?????

Tiggs

 

Tiggs -- RTFM! I made the numbers up -- I could equally have said 100k mortgage with 10k a month pay. The principle is the same.

 

RTFM?

err- i agree i think! - principal is the same- big surplus or it dont work?

Tiggs

 

Steve,

You gonna get a room with a wall large enough to get a large TV screen on for the CS sessions???

 

lol @ 'chelle

yeah i reckon as long as there is a big wall for a huge huge flatscreen tv for CS i'll be ok

well as long as the place can get adsl to !!!

ta for all the info, its all good reading.

going to be visting people early next week to discuss my actual options.


steve

 

excellent web site for calculators and best deals is:

http://www.ukmortgagesonline.com/

I'm looking for a 2-3 bed house in woking with garage, and selling a 1 bed in Woking.....

 

Tiggs -- I agree. Surplus needed at the end of each month. Might be better off saving it up and paying off a lump sum in one of those 'flexible' mortgage plans.

 

lots of loans have the option of repaying an amount (10% say) without penalty- that may be enough for some people and so the benifit of a good fix/discount rate with 10% lump sum paid of each year may be more than can be obtained via the other route- god isnt this boring as hell

Tiggs

 

my estate agent charges 1% and has been superb (so far) so anyone in lower early/ reading try whiteknights!

Tiggs

ps- they also seem to price a bit higher than others in my opinion but people are still buying!

edit to sound less iffy

[Edited by Tiggs - 2/12/2002 1:32:27 PM]