First Active Offset Mortgage

This is my 1st real post on this site, so apologies if this has been tackled elsewhere already (I searched and could not find answers to my questions).

I currently owe just over €82000 on my mortgage, but my house would probably be worth around €220,000 at a push (although with market as it is it might be difficult to sell !!).

Anyway, not planning to sell but have recently been thinking that an offset mortgage ight suit us better.

My wife recently had her SSIA mature, plus we would have some savings.

We could afford to pay whatever the mortgage repayment would be every month PLUS put away a few hundred Euro extra. I thought that putting most of her SSIA into a linked account would help too, but a few have advised that they would not do this as all the savings will be gone when the mortgage eventually is paid off.

I appreciate that the rate of interest is higher than with other mortgages, but do you think that an offset would be best for us if we are disciplined and put away extra money each month (say €400).

The offset calculator makes it look very attractive. I like the idea of wiping nearly 8 yrs off my 16 yr mortgage.

Any offset people on here that could advise if they are happy or would a lower rate be better? (when getting my settlement figure from AIB they offered me an additional 0.5% cut in my rate as my LTV is now <50% - I had been on the <60% tracker).

Sorry for long post - any advice appreciated.

I looked into moving to an offset mortgage but in the end I decided against it. My situation was that I had about 40k in savings after my SSIA matured and I wanted to offset that against my mortgage. I went to a broker and after explaining that I would only have that sum for about a year, he advised me against moving. I'm saving the money to go travelling in the future and he explained to me that the Offset mortgage is only worthwhile if you have about 50k permanently in your account. The offset mortgage has a higher than normal interest rate so you have to work out if it's worthwhile, or if you're better off sticking your lump sum into a high interest savings account, of which there's a lot out there. In the end I moved to a LTV of less than 80pc with a different bank and stuck my savings in a savings account. Obviously the banks offering the Offset Mortgage will make it look very attractive but I would highly recommend talking to a broker as they will recommend what is best for your personal situation.

Thanks for the reply.

I appreciate that an offset isn't the best thing since sliced bread but I do think it might be ok for me and my wife.

She too had an SSIA mature, but the mortgage advisor at First Active recommended not putting all this into an account offset against mortgage as it would all be gone when the mortgage was paid off. All savings would be lost.

She did advise putting it into a higher interest account for maybe 5 years, and then putting the interest earned on that into the offset account. She said it was always handy to have savings!!

So what we were planning to do was just put €200 each per month into the offset account. This €400, along with the €1000 that FA give you free, would take 7 years off our mortgage. It still sounds good, plus we have our lump sum for a rainy day.

Sounds good - but I'd still talk to a broker. It will only take about 30minutes and you might find that another bank is offering something even better for you and your family. That said, First Active might be the best for you

It is no longer the case that your savings automatically clear your mortgage when the balances are equal, you can retain your savings and still continue to pay the mortgage while still saving interest.

We've used the offset since 2003, and it has worked really well. The facility (savings) account that sits beside the mortgage, benefits not only from any lump sum that you park there but from you salary lodgement, as the average balance in the facility account is deducted freom\the avg. bal in the loan account for calculating interest. Also First Active, don't seem to charge transaction fees on all of our direct debits . Your savings effectively get a return equivalent to the mortgage interst rate, which is higher than that available on any deposit account. First active only take your net mortgage repaymnet by dd from facility account and collect the TRS balance from the Govt. Their monthly summary is vey good and has improved since the First Active and Ulster Bank systems merged under Royal Bank of Scotland (not to be confused with Bank of Scotland Ireland). The online banking with F.A. is reasonably good, but for some raeson we cant set it up to pay AIB visa (MBNA Visa works fine). Our flaw with First Active is the customer services desk, and delays in setting up new direct debits, both of which have been frustrating in the past, but which now have improved.