Should I use an Offset Mortgage?

S

shg101

Guest
I am buying a holiday home for about €140k. I have a lot of cash available that I do not want to tie up.

So I was planning on getting an 80% mortgage.

However, I then thought about getting one of the offset/savers mortgages (maybe KBC are the only ones offering it?), so that when the rates go up above the deposit rates I can move my cash into that.

What do people think?

Alternative is that I go with a cheap 2 yr fixed, and then see about switching later (which may not be an option in 2 years time).

Thanks
 
Thanks for the lead on NIB.

I'm leaning towards such a mortgage based on the >4.4% variable investment quotes I'm getting. Although I don't know yet exactly what rate the offset/safer mortgage would be for an investment property such as a holiday home.

I wonder would Ulster Bank let me increase my 40% LTV tracker I have with them on my main house and put that towards the holiday home?
 
I'm pretty sure the KBC saver/offset mortgage is only for residential purchases not investment properties.

[broken link removed]
 
shg101 said:
It is a holiday home for my own use. BOI tell me this means it is an investment property.
Click to expand...
You might want to ask them to explain why a non-investment property is considered to be an investment property by them? Just seems strange...
 
Complainer said:
You might want to ask them to explain why a non-investment property is considered to be an investment property by them? Just seems strange...
Click to expand...

Presumably they will say that residential rates are only on offer for the family home, investment rates apply to all other properties.
 
NorfBank said:
Presumably they will say that residential rates are only on offer for the family home, investment rates apply to all other properties.
Click to expand...


Yes, that is what BOI at least told me. If some other provider didn't have this restriction I'd go with them in a shot.
 
shg101 said:
I am buying a holiday home for about €140k. I have a lot of cash available that I do not want to tie up.

So I was planning on getting an 80% mortgage.

However, I then thought about getting one of the offset/savers mortgages (maybe KBC are the only ones offering it?), so that when the rates go up above the deposit rates I can move my cash into that.

What do people think?

Alternative is that I go with a cheap 2 yr fixed, and then see about switching later (which may not be an option in 2 years time).

Thanks
Click to expand...

I don’t know but I would have thought banks offering Offset Mortgages would have a limit to the amount one can offset.

I’m just curious, why would they give you an offset mortgage of say €100K knowing you have substantial savings to offset against it ?, they would only get interest on a small portion of this €100K.

Surely they would be better giving that €100K to someone with modest savings and get interest on most of it for a longer period.

The benefits to you if there were no limits would be enormous as effectively you would be getting a mortgage rate of interest on your savings and also getting it DIRT free.

Possibly this explains why they only offer this mortgage on PPR’s.
 
twofor1 said:
I don’t know but I would have thought banks offering Offset Mortgages would have a limit to the amount one can offset.

I’m just curious, why would they give you an offset mortgage of say €100K knowing you have substantial savings to offset against it ?, they would only get interest on a small portion of this €100K.

Surely they would be better giving that €100K to someone with modest savings and get interest on most of it for a longer period.

The benefits to you if there were no limits would be enormous as effectively you would be getting a mortgage rate of interest on your savings and also getting it DIRT free.

Possibly this explains why they only offer this mortgage on PPR’s.
Click to expand...


I agree with what you are saying - which is why I'd be so happy to get it! Maybe in the small print there is some limit on the max offset?
 
You must log in or register to reply here.
Back
Top