Lovemoney.com
Sign in Register
Follow this topicFollow this topic Q&A » Mortgages

Woowich Offset Tracker Mortgage - savings v paying off

Firechick
by Firechick 18 March 2010  |  Comments 2 comments  |  Love Love  0 loves

I have approx £39k mortgage with under 9 years left to pay on an offset tracker mortgage. Having had 2 kids in the last 5 years, my salary has dropped and I'm no longer working full time (using all my wages to pay mortgage and childcare!) so I think I'd find it hard to re-mortgage at the moment. I now only have savings (being offset) to the tune of 7k and my mortgage current account is now - £8.5k. Do you think I would be better off financially putting all or part of my savings into the mortgage current account to reduce the amount I'm overdrawn? Sorry if this is a stupid question - I am not very money wise.

Thanks in advance.

Report

Enjoyed this? Show it some love

Twitter
General

Comments (2)

  • Swarbs
    Love rating 272
    Swarbs posted

    Do you know the interest rates? Putting the money into the mortgage current account is likely to be the best move - the interest rate on your savings is likely to be much lower than that on your mortgage, so that will almost certainly save you money. However, you should make sure that you can take the money back out of your mortgage current account at any time without delays or penalties. If you have an unforeseen expense (broken boiler, car breakdown etc) then you need to be able to get at the money quickly. Otherwise you will end up having to borrow expensive personal debt (loan or credit card) to pay for the expense, and the cost of this will wipe out any savings you make. Check with your mortgage company to make sure that you can take the money back out quickly if you pay it in - most offset mortgages will make it easy to do this.

    Posted on 18 March 2010 | Love Love  0 loves Report
  • MikeGG1
    Love rating 804
    MikeGG1 posted

    If the mortgage current account refers to underpaid mortgage then it will be affecting your credit rating so should be paid off as much as you can, possibly by regular payments.

    However, you need to keep an emergency fund of at least 3 months net pay.

    Are you a single parent? If so, are you getting any maintenance for the children?

    I would suggest that you post here: http://boards.fool.co.uk/dealing-with-debt-50079.aspx It is the sister site to LoveMoney. There are experts there on dealing with debt.

    Mike

    Posted on 18 March 2010 | Love Love  0 loves Report

Post an answer

Sign in or register to post an answer.

Something you're dying to ask... or answer?

Register with lovemoney.com to start asking and answering questions on Q&A.

Get started now

Sign in for a better Q&A

Registered already? Great! You can just sign in to ask and answer questions.

Sign in
W3C  Thank you for using The Four Horsemen of the Apocalypse