Don't touch FA Offset Mortgage

D

deegan

Registered User
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I have an FA Offset mortgage(balance (€117000) and was paying double the amount due every month 1400 Vs 800.

When I rang FA to ask when I would finish paying off this mortgage they told me ten years (117 months). The irony of this was that I went into the FA website and could get a 9 year (108 months) for €1200 which is €200 a month cheaper than what I am paying at present after TRS. I could get it even cheaper through BOS.

I rang FA to ask them were my figures correct and could I switch my mortgage to a tracker with them and that they would pay my legal fees. They agreed that my figures were correct but could not understand why...They said they were getting there marketing division to look into my figures and would ring me back in regard to switching...

Guess what they haven't so now I am going to get in touch with BOS and switch my mortgage to them.

I would recommend everybody here to check out www.mortgages.ie and check their mortgage repayments, you can and will save thousands.
 
deegan

Is it that complicated? You have a long message without once quoting interest rates.

What interest rate is your offset mortgage? Is it a tracker?

What rate is the other option on the FA website? Actually, what is the other option?

It seems that you don't have a full grasp of the product, so you should be slow to change until you do understand them.

Brendan
 
The rate on your offset is 5.15%, the rate on a below 80% LTV tracker is 4.75%. This would probably account for the lower term. However if the only use you have for an offset mtg is to pay extra monthly payments then it is not of benefit to you, you could do that with a tracker. The offset mtg can have up to 5 accounts linked to it on which the balances are offset against the balance of the mtg before calculation of interest. If that sort of arrangements suits someone then it can work well, however if you just want to pay higher monthly payments you dont need an offset.
 
Ok Brendan

Original FA Offset mortgage €145000 over 25 years 5.3% at present = €820 a month. FA online calculators say if I put an extra €600 a month this will reduce mortgage by 15 years = €168000 over the next ten years.

FA tracker mortgage LTV <80% over 9 years 4.9% at present = €1333.56 a month = €144000.

BOS tracker mortgage LTV <80% over 9 years 4.64% at present = €143000.

Total savings up to 25000 over 9 years.

1. As far as I know you cannot get offset tracker mortgages.
2. the other option is a tracker mortgage using the www.mortgages.ie website as a guide to what other offers there are out there.
3.I have a full grasp to know that if I was to continue to pay FA €1400 a month for the next 10 years my local FA manager would be very happy and I woud "lose" €25000
4. Is it that complicated? to somebody that didn't have internet calculators to work out how the banks worked out the interest payments the answer is yes. To somebody that can now see that the banks have been creaming it for more years than I care to remember all I would say is look around and you can say a lot of money.
 
You are making it far more complicated than it needs to be.

You are paying 5.3% for your current mortgage.
There is a mortgage available at 4.6%
That is a saving of around .7%

If your mortgage is €145k, you will save around €1,100 per annum in the initial years by switching.

It doesn't sound as if you are getting any of the benefits of an offset mortgage. Why did you take one out in the first place?

Brendan
 
Sounded like a good deal at the time circa 7 years ago. I've got a couple of promotions since, few bob more in my pocket and I want to pay it off and quickly as I can. I was just trying to highlight to people that even with their present bank and if their on an offset they can save a lot if they do there homework. At this stage I fail to see any benefit with offset mortgages.

Cheers for your comments,
 
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