Offset mortgages

Offset mortgages are an emerging sub-division of the flexible mortgage market, and are proving ever more popular both with UK mortgage lenders and mortgage-holders. These mortgages offer you the ability to offset your savings against your mortgage to save money.

With most offset mortgages you are charged interest on the difference between your mortgage debt and your savings. So, while your monthly direct debit to the lender remains level, you are in effect overpaying by varying amounts each month, as your savings turn what would normally be straightforward interest payment into capital overpayment.

The degree to which you will benefit from an offset mortgage will of course be affected by the amount of savings you have, and those with large amounts of money in the bank can benefit enormously. However, even if you have very few savings currently, or even if you are simply planning to save in the future, the potential benefits of an offset mortgage are clearly worth consideration.