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Issue 49 - June 2007
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With continued interest rate uncertainty, this week we explore Offset Mortgages and explain how they can save you a fortune in interest. We also look at how you could be ripped off by your lender if you take out one of their Mortgage Payment Protection policies and suggest ways to avoid this happening to you.
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| Most potential house buyers look for a conventional capital repayment or interest only mortgage when arranging finance for the purchase of their home. Another alternative worth considering is an Offset Mortgage (sometimes called a Flexible or Lifestyle Mortgage) which can have benefits for tax payers in general and high rate tax payers in particular and is becoming more common in the mortgage market place.
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How does it work? With traditional mortgage and savings products you usually pay a higher rate of interest on your borrowings than you receive on your savings. If you are a taxpayer you may also pay tax on the interest that you earn on your savings.
By combining your mortgage and savings into one account the lender will reduce the mortgage balance on which they charge interest by an amount equivalent to the savings held. The amount of interest you pay thereby reduces although you do not receive any interest on your savings balance. However, this means that you are in a win - win situation as you will pay less mortgage interest which could cut years off the mortgage term and you don't have to pay tax on your savings as you are not earning any interest.
Offset mortgages are also usually very flexible in that they often allow you to take payment holidays or over and under-pay within certain limits.
To find out more we provide details of thousands of mortgage deals including offset mortgages or can offer you the chance to speak to a mortgage adviser. |
If you are currently paying for a mortgage payment protection policy to cover your mortgage against accident sickness and unemployment then the chances are that you are paying more than you need to.
Our survey shows that many of the High Street lenders are charging unnecessarily high premiums for this cover and similar or better policies can be obtained independently by shopping around. |
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Our figures below show examples of the premiums being charged by high street lenders, with some charging more than double the fees charged by the cheapest independent providers.
Our advice to policyholders or those thinking of taking cover is to shop around to find the best product. In addition, make sure that you will be eligible to claim on the policy, particularly if your employment situation is out of the ordinary in any way. There are numerous cases of claims being refused by insurers simply because restrictions in the policy were not explained properly or the small print had not been read.
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2 great reasons to review your live cover today.
Go >>> |
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Compare the market to find the best deal
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Compare 0% balance transfer cards plus many many more.
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Get impartial advice from one of our experts
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Key Retirement Solutions | | | | | | |  | | Unlock Cash From Your Home. Aged 60-95? Homeowner? Release tax-free cash from your home with no monthly repayments to meet. | |
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Hiscox Home Insurance | | | | | | |  | | Comprehensive cover for possessions worth over £45k. Competitive premiums. Outstanding claims service | |
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Swinton Car Insurance | | | | | | |  | | Up to 20% off when you buy online. Cheap quotes from the UK's top insurers. | |
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| spotlight on...
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| credit cards | |
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HSBC Credit Card
 Typical 15.9% APR
variable
0% on balance transfers
for 12 months
0% on purchases for 3 months
MBNA Platinum Plus
Typical 15.9% APR
variable
0% on balance transfers
for 12 months
0% on purchases for 3 months
MBNA Platinum Rewards
Typical 15.9% APR
variable
0% on balance transfers
for 12 months
0% on purchases for 3 months
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| life insurance | |
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Life Cube Life Insurance
Compare 200+ life plans
in minutes
Life cover from £5 a month
Cheap life insurance quotes
Protected
We search over 300 life
insurance plans from the
UK's top brands
Get our cheapest quote
online now
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| mortgages | |
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Debtbuster Mortgages
WHY waste time searching
when we can do it for you.
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outgoings.
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Lloyds TSB Mortgages
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CCJs, bad credit, arrears?
All considered
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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| banking and saving | |
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Bank of Scotland Instant Access Savings Account
5.50% AER
Based on no notice direct
savings account on balance
of £1
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| unsecured loans | |
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Northern Rock Low Rate Loan
6.9% APR Typical on
£1,000 to £25,000
Instant online decision usually
provided
Same day funds option
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| homeowner loans | |
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Picture Loans
Typical 8.4% APR
variable
£10,000 to £100,000 over 10 to
25 years
Any purpose secured loans at
competitive rates
Nemo Homeowner Loans
Typical 8.9% APR
variable
Secured loans with a
loyalty bonus
Borrow £10,000 to £100,000
Repayments over 10
to 25 years
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| adverse homeowner loans | |
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Loans.co.uk
Typical 12.9% APR
variable
£7,500 to £100,000 over 5 to
25 years
Nothing to pay for first 5 months
Get a free quote today
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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