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.

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shg101 said:
It is a holiday home for my own use. BOI tell me this means it is an investment property.
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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...
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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.
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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.
 

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.
 


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?
 
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