Hi Exff

Looking at the maths - and assuming you swapped your mortgage in May - you would have 20 months left to pay.

Staying out that would cost you 20 x £467 = £9807

If you swapped mortgage to the First Direct 2.89% offset tracker, the monthly payments would reduce to £349 on a £74,500 mortgage - but it will cost you £2,500 in early repayment charges and £1,129 in up front fees with First Direct (assuming valuation fee of £330 - that may be lower depending on the value of your home)

New mortgage is 20x £349 + £2,500 + £1,129 = £10,959

So in financial terms, you are better staying put. Although the offset facility will reduce the amount of interest that you pay, the fact you have such hefty fees to swap would really wipe out the benefit.

However, if you are looking to lower your monthly repayments, you may still find the First Direct an attractive offer. Alternatively, if you are allowed to make capital repayments off your current mortgage, you could reduce your balance on a monthly basis with some of your savings to bring your repayments down.

Sorry if this sounds very complicated!

Hi louise

Lender does not have offset facility.

Was thinking of First direct offset, which has min £30000 mort leaving me some savings to offset.

But do I do it now or wait?

Thanks for advice

Hi exff

From a purely financial point of view, you will be paying more on the mortgage interest than you are earning on your savings. Assuming you are a basic rate tax payer, you would need to get an interest of over 6.48% on your savings to be better than the mortgage rate - and you would be doing brilliantly if you were getting such a high return.

However, there are other considerations as well as just the pure financial ones. Unless you have an offset product, you are unlikely to be able to pay off a big lump sum without attracting an early repayment charge. Does you current Lender allow overpayments or give you an offset facility?

The other consideration, if you do not have an offset facility, is your need for accessible savings for any planned expenditure. Once you make a capital repayment off your mortgage, it is not easy or cheap to borrow your own money back again. Thus if you feel you will need some of your savings quite soon, then you will need to make sure they are still available at fairly short notice. That means not using them to repay your mortgage.

Hope this gives you some early pointers.

Could anyone please advise me.

£74500 mortgage fixed @ 4.99% till Dec 2010 giving monthly payments of £467 redemption fees £2500 (20 year term).

Savings of £70000

Do I invest savings and wait till rates improve or payoff part of mortgage with an offset mortgage.

I am only just managing to keep up monthly payments of mort?

Any advice would be helpful.