Thanks for comments both of you. As the required savings payments fall within the limits, I was hoping to use an ISA as the savings vehicle so that it is tax free. I am really struggling with this at present, trying to find a regular savings ISA that returns 3%+, and am really wondering if it wouldn't be simpler to just go via the repayment route and face up to living on pot-noodles if it all goes horribly wrong.

The problem is, I have no idea what it costs to live on my own. Compared to the size mortgage others I know have, who are on less income than me, I shouldn't have a problem (on a repayment mortgage my monthly payment will be circa £560 - £580 from a nett income of £1800 after mtce payments) but it is the step into the unknown that is concerning. I am borrowing a bit more than I strictly need to, keeping £20k back for essential works to the new property (£10-12k) and a bit of "rainy-day" money (used to off-set).

The issue for me is flexibility - it may be that I need to pay less in for a few months, then overpay a bit later once the "hiccup" has passed.

I really appreciate any help and suggestions as to my best way forward.

Not sure if this helps fulfill the lenders criteria but you can effectively use the offset savings bit as a repayment vehicle whilst still keeping things fairly flexible. If you keep the interest payments as they would be for the whole loan and put your £300 into the offset savings account each month you are effectively slowly paying down the loan at whatever interest rate you are paying on the loan (which is likely to be much higher than anything you can get from a savings account once tax is taken into account) and also building up a fund to eventually pay it off but one which can be drawn on in an emergency.

Just a word of warning.

The way that lenders view and treat Interest Only mortgage applications is currently going through a big overhaul with all lenders....Coventry BS included will not accept the implementation of an investment repayment vehicle to cover an interest only mortgage. They want to see something that is already established for a minimum of 6 months before they will accept the application on Interest Only. Other lenders are less stringent on this and they may be ideal for your purposes and most lenders will have an offset account of some kind that you can work with or alternatively see if you can just take a product on their variable rate....Coventry BS also have this available too

Before you make any plans for potential investment vehicles it would be best to check to see which lenders will accept what method of repayment vehicle.

I don't know what level of deposit you have for your new purchase but it should also be noted that I think there is only 1 lender in the UK (Leeds BS) that will allow you to borrow above 75% on an interest only basis and then they will only lend if you take the remainder on a repayment basis, they may also have conditions for the initial 75% too

Good Luck

Help!

I have just divorced and am uncertain of my expenditure needs in buying a house for myself. I will be paying child maintenance for the next 5 years.

Because I am not certain of my monthly outgoing requiring requirements, I want the mortgage to be as flexible as possible. I have found an offset interest only tracker mortgage with the Coventry BS, but can't seem to find a savings plan to act as the repayment vehicle for what I need - most of the monthly savers paying decent rates (3.5%+) are either capped at £250/month max payment (I need circa £300/mth @ 3.5% to pay back £110k over 20yrs).

I am searching for the best way to keep my mortgage repayments as flexible as possible for potential emergencies in the first couple of years, keeping as much of the money (savings) accessible on my side of the fence, as opposed to a repayment mortgage where once given to the lender I cant get access to it again .... then in 5yrs when I no longer have to pay child maintenance I can put all that money into my mortgage (currently circa £385/mth)

any help or advice on my best way out of this would be appreciated!