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Off Set Mortgage Will It Prevent You Getting Benefits?

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Question for all you knowledgeable people out there,If you have a offset mortgage with say with over £16000 in the savings part does this make you ineligible for benefits ?

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Question for all you knowledgeable people out there,If you have a offset mortgage with say with over £16000 in the savings part does this make you ineligible for benefits ?

Yes.

It is a savings account.

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DO NOT, I REPEAT, DO NOT be responsible with your money. Saving money is a bad idea. Spend whatever you`ve got, never mind the future. Your lack of prudence will be rewarded should you lose your source of income. If you do save a reasonable amount, you will be punished should you lose your job. In fact, the more you borrow, the more help you will get if things turn for the worse. Uncle Gordon will look after you, as long as you don`t save.

In fact, you shouldn`t bother with an offset mortgage, what you need is a BIGGER mortgage.

You know it`s the right thing to do.

Edited by Prof

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DO NOT, I REPEAT, DO NOT be responsible with your money. Saving money is a bad idea. Spend whatever you`vie got, never mind the future. Your lack of prudence will be rewarded should you lose your source of income. If you do save a reasonable amount, you will be punished should you lose your job. In fact, the more you borrow, the more help you will get if things turn for the worse. Uncle Gordon will look after you, as long as you don`t save.

In fact, you should`t bother with an offset mortgage, what you need is a BIGGER mortgage.

You know it`s the right thing to do.

Sorry i forgot.

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That's interesting.

I have an "offset" mortgage, but it's all handled through a single account. It's basically a 150K borrowing facility secured on my house; and I can draw-down anything overpaid up to the full £150K at any time.

Under that set-up; assuming i've overpaid by £16K would that too disqualify me from benefits were that situation to arise? (fingers crossed it won't). But it is strictly speaking money that I have instant access to...

Edited by djm1972

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My understanding is that yes it would because you can physically get to that money if you need to.

We had a few months on benefits this year and the jist was we were asked do you have savings, we said no, end of conversation. We had actually just been paid £50k in redundancy money, which was spent on essential repairs and paid off debts but that was never even questioned.

My advice would be pay any savings off your mortgage, debts or go on holiday (because you'll need it) and then apply for benefits.

However you do realize they may not pay the rent on the nice house that people rent and will count your bedrooms, where as if you own our house they will pay up to £200k of interest whether it's a one bed flat or 6 bed mansion.

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I have an "offset" mortgage, but it's all handled through a single account. It's basically a 150K borrowing facility secured on my house; and I can draw-down anything "overpayed" up to the full £150K at any time.

I've seen an enquiry on a forum from someone who'd been stoozing low interest cash from credit cards and putting it in a savings account to earn a higher rate of interest. When he lost his job, the sum in the savings account was considered to be just that, savings, and took him over the £16,000 so he couldn't claim.

Given that this was definitely borrowed money, and was still got counted as "savings", I suspect that any money you can get hold of would also be considered "savings".

I'm not an expert, so I don't know for certain, but the case I mention makes me wonder.

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Question for all you knowledgeable people out there,If you have a offset mortgage with say with over £16000 in the savings part does this make you ineligible for benefits ?

Sounds like you're in the same position as I, stitched up all round. I'm just hoping prices will drop that much I can buy with a large deposit or buy outright. Been in the doldrums for years

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That's interesting.

I have an "offset" mortgage, but it's all handled through a single account. It's basically a 150K borrowing facility secured on my house; and I can draw-down anything "overpayed" up to the full £150K at any time.

Under that set-up; assuming i've overpaid by £16K would that too disqualify me from benefits were that situation to arise? (fingers crossed it won't). But it is strictly speaking money that I have instant access to...

Yes would be interested in an answer to this. About to be made redundant and after having paid six figures of tax over the last 10 years of work wouldn't mind getting some back now my income will be zero.

Theoretically would this work? Could I get an offset mortgage, hide my savings in it so I qualified for JSA, then take my savings out, so that I qualified for MSI on my interest repayments? (http://www.jobcentreplus.gov.uk/JCP/Customers/WorkingAgeBenefits/Dev_016128.xml.html)

I suspect not, and don't think I'd feel right about doing so even if I could. But it does seem perverse that if I had been reckless, spent everything I earned and got a big mortgage (rather than saving and staying within my means), that I would have got a lot of government support when made redundant. The way I played it I'll get nothing.

Ultimately of course the point of is to provide help to those that need it and deserve it, not those that don't need it (like me) but still.

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Question for all you knowledgeable people out there,If you have a offset mortgage with say with over £16000 in the savings part does this make you ineligible for benefits ?

As I see it, I suspect that you`d lose some of your benefits. One way around this would be to pay off some of your mortgae with some of the £16K. If you suddenly decided to buy a flash car with the money, I think they still cut your benefits, but I doubt that paying off some of your mortgage would be seen as trying to "beat the system".

Can anyone tell me if I`ve got this right ?

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I imagine it all boils down to whatever number you write in the SAVINGS box on the application form.

If you've got a plausible reason why the money in one of your accounts isn't actually yours then feel free to write zero.

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I imagine it all boils down to whatever number you write in the SAVINGS box on the application form.

If you've got a plausible reason why the money in one of your accounts isn't actually yours then feel free to write zero.

D'you know; on that basis I've been through the T&C of my mortgage, and everything i've signed; to try and find some kind of "margin call" clause. But there is nothing. Nowhere does it say that I could be denied the opportunity to draw down at any time during the 25 year period of the facility.

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how long before the gov invents an unemployment loan, which everyone is instantly elligable for and stops you from getting benifits

Its called student finance, do keep up :lol:

The mortgage limit for the DWP paying the interest is £200k, I should add...

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As I see it, I suspect that you`d lose some of your benefits. One way around this would be to pay off some of your mortgae with some of the £16K. If you suddenly decided to buy a flash car with the money, I think they still cut your benefits, but I doubt that paying off some of your mortgage would be seen as trying to "beat the system".

Can anyone tell me if I`ve got this right ?

This is a great source of information. It also covers what is and isn't regarded as stoosing capital away in order to get benefits. You can legitimately spend it on a holiday!

http://www.dwp.gov.uk/local-authority-staf...1b.shtml#b_w170

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D'you know; on that basis I've been through the T&C of my mortgage, and everything i've signed; to try and find some kind of "margin call" clause. But there is nothing. Nowhere does it say that I could be denied the opportunity to draw down at any time during the 25 year period of the facility.

You can't be denied it, but the cash available to you though the facility (your effective credit limit) can be reduced, even to zero if they wish. They just say your house isn't worth as much as it was, therefore you have less equity.

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You can't be denied it, but the cash available to you though the facility (your effective credit limit) can be reduced, even to zero if they wish. They just say your house isn't worth as much as it was, therefore you have less equity.

But surely that would have to be spelled out somewhere, wouldn't it?

It pretty much boils down to the fact they just want the account to have a balance of £0 in 25 years time. That's it. There is no mention of any difference in property value or any "right to revalue" at all. :blink:

Edited by djm1972

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So if I get made unemployed or get a lower-paid job, my best bet is to take out a mortgage with my savings double-quick, then I can claim benefits til kingdom come.

It's political correctness gone mad. And they wonder why people don't save?

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So are there any mortgages left where you can overpay then are guaranteed to be able to borrow it back?

There used to be such things.

VMR.

Britannia are quite happy for me to pay off lump sums - In October will pay off £25K as the interest goes up. I have banked the money for the time being as I am getting a better rate on it. My Mortgage %APR is 0.55%

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If you have an offset mortgage and you are in credit by a significant amount, you could ask the lender to reduce the lending facility... ideally before you are going to claim benefits. Then you can tell them you only have access to say £4k of potential cash.

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So if I get made unemployed or get a lower-paid job, my best bet is to take out a mortgage with my savings double-quick, then I can claim benefits til kingdom come.

It's political correctness gone mad. And they wonder why people don't save?

Well in the months leading up to unemployment that would be a shrewd move to make, use the deposit to round the number down to £200k and then enjoy a year or 2 off thanks to DWP. People really really shouldn't stress, as long as they are a home owner.

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Well in the months leading up to unemployment that would be a shrewd move to make, use the deposit to round the number down to £200k and then enjoy a year or 2 off thanks to DWP. People really really shouldn't stress, as long as they are a home owner.

I love the way people think the status quo will always be.

Less than 12 months till the next election.

The day after that, all ******ing hell breaks loose when taxes go up and benefits go down and they start hunting for people who might in some way have defrauded the system.

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I love the way people think the status quo will always be.

Less than 12 months till the next election.

The day after that, all ******ing hell breaks loose when taxes go up and benefits go down and they start hunting for people who might in some way have defrauded the system.

They're going to hunt down Gordon Brown? Sweet!

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