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Ahmed
Stranger
Joined: 17 Feb 2005
Posts: 8
Cash Points ££ 20.00
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 Posted: Mon Apr 17, 2006 1:52 pm Post subject: use excess savings to paydown your mortgages |
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After you have filled your ISA's use your savings to paydown your mortgageso as to reduce those monthly repayments (or reduce the end date of the mortgage).
Usins saving accounts such as ICIC deposits, about 4% net, Comparing this with the interest being charged by your mortgage lender, which is normally over 5% and some above 6%, the mortgage is almost always significantly the higher rate.
I heard about this view of things (reduce the mortgage with ones savings) and, finally, started looking at it. For me, in my circumstances, I think it makes sense. Maybe others have different situations and it does not work for them, I am only saying it is well worth a close look, in case the mortgage is quietly ripping away more in interest than you are gaining in savings interest.
After filling my ISA's for the 06/7 year, and have had the rest in ICIC. My thoughts were that I could move the cash from the internet deposit if I needed it for the business or whatever. The bulk of that cash has been quite stable for several years, so I decided to shift most of it into the mortgage and thereby save the interest benefit on that sum, up from about 4% net, up to 5.5% which represents a big saving on mortgage payments.
In my case I can borrow more cash on my mortgage at any time, at the same quite-good %rate. So it is a bit like a “Offset Mortgage” as cahoot used to run, Also, this %rate is much lower than the Offset Mortgage they offers currently doing the rounds
if worsed came to the worst I suppose I could liquidate an cash isa
Well, this is what I planned on doing and yuo may find this useful for yuor situation as well.
if you have any better ideas then please do post, as I have described all this to help some people start thinking about their own situation, in case they might be able be able to make large monthly savings. |
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needcash
Beginning Saver
Joined: 13 Feb 2005
Posts: 30
Cash Points ££ 407.50
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| Posted: Tue May 09, 2006 11:33 pm Post subject: |
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| Do cahoot still do the offset mortgage ? |
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