Offsetting mortgages

[Blubell46]

Morning,

I am looking to offset our mortgage which is up for renewal this April- bad timing since rates have gone up.

I have found a lender where I can offset my saving a with our mortgage .

Has anyone heard of Coventry building society? I haven't till now and they seem to be doing a good deal.

This is new to me - offsetting so have anyone has any advice, I would really appreciate your tips.

Thank you so much.

Coventry BS is a mainstream lender (I’m a conveyancing solicitor).
We’ve had an offset mortgage for 8 years as DH is a contractor. It works well for us. We get a monthly statement showing the interest on the mortgage and on our savings.

I've had a couple of savings accounts with Coventry over the years and they've always been good.

My offset mortgage served me well in the 2000s - I used to pay in my whole salary and then take cash out as I needed it. Also I benefited from some occasional lump sums, which really helped bring down the interest payments.

Of course the financial landscape was different then. Rates are higher now on offsets and you'd have to crunch the numbers. But if you've got savings that haven't already gone into your deposit, or are expecting a bonus that could be more than the usual 10% penalty-free overpayment limit, they can work out well for you.

Thank you so much .

I've definitely heard of Coventry Building Society and a quick Google tells me it's the 2nd largest in the UK.

We had an Offset Mortgage with another bank. It worked great for us. You pay a slightly higher interest rate than on an ordinary mortgage. We had it offset against our current account - salaries went in there - and our savings account. We still had full access to our savings if we needed them. We used the offset mortgage a number of times over the years to take additional borrowing for home improvements. It was a quick phone call, no arrangement fees, borrowing at the same mortgage rate and cash in the bank within a day. We still paid the mortgage off early and in the latter years we weren't paying any interest on the mortgage as our savings balance exceeded the amount we owed. A lot if lenders stopped doing them at one point.

We've had an offset mortgage for 7 years and it's worked well for us until the last year or two where interest rates have increased significantly. We are now better off having our savings in high-interest savings accounts and just paying the interest on our mortgage. It's way more fiddly, having to keep moving stuff about to get the best deals, but as someone above said, crunch the numbers and see where your money is best placed.

PS I've definitely heard of Coventry BS but not used them personally.

Thank you all for your advice

We've had an offset for nearly 20 years (14 on the last house, 5 on the current one). We took a new 5yr fix this year, the difference in interest rate between the offset and the non-offset version was about 0.2% I think. They tend to allow unlimited overpayments as well as the saving on interest - we can't afford to overpay as much now, but on our first house the combination of overpayment and savings on interest would have allowed us to pay the mortgage off about 7 years early if we'd stayed there.