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Re mortgage options?

Last post Thu, Jul 03 2008, 5:09 PM by LoanInsider. 1 replies.
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  •  Tue, Jul 01 2008, 8:15 PM

    Re mortgage options?

    Hi all,

    I am looking to re mortgage my property when my current deal comes to an end at the beginning of October.

    I am looking to pay off my mortgage of 80k (property value is 200k) asap. Probably somewhere between 5 and 10 years.

    The household income is in the region of 35k per annum (just over 2k/month) and I have savings of 20k.

    What would my best option be? I have been thinking about an offset or current a/c mortgage.....is this the best idea or would a more traditional fixed or tracker rate mortgage be more beneficial?

    Any views would be welcome.

    Thanks in advance

    • Post Points: 20
  •  Thu, Jul 03 2008, 5:09 PM

    Re: Re mortgage options?

    I've had both products at various points and would offer the following two pennies of advice.

    1) Good for you, focussing on early payment of your mortgage - smartest thing anyone can do financially.

    2) Offest mortgages are great if you have a chunk of savings and you want to keep it available, but they generally do not have the best interest rates. If you feel in any way insecure about your emploment, that of your partner, or chance of a big hidden cost suddenly arriving, then its good to have an offset, where your savings are working on the mortgage balance, but remain available.

    3) A fixed rate or tracker may give you a better rate in the short term, but in order to have you savings reduce your mortgage balance, you'd need to commit the 20K at the point your remortgage. Whenever I've done spreadheets, this has been the better way to reduce th emonthly payment and overall amoutn paid back over th elifetime of the loan, BUT it does take away the flexibility of having that 20K for any unforseen problems.

    Best of luck

    • Post Points: 29