Could an offset mortgage work for you ??

Are you making the most of your savings.... An offset mortgage essentially links your mortgage to your savings, and saves you money. The savings balance is used to reduce the amount of interest charged on the mortgage.

The way this works is by having your savings, 'offset', against the value of your mortgage. You then only pay interest on your mortgage balance, minus your savings balance. Your savings don't actually repay any of your mortgage, they just sit alongside it and save you interest. Your money is working for you.

Example: Your mortgage balance is £100,000, and your mortgage interest rate is 4.5%. You also have £10,000 in a savings account. - By offsetting the £10,000 in savings, you will only pay interest on £90,000 of your mortgage. Over the course of the year this can save you up to £450. - If you'd have left these savings in a savings account paying 3.00%, you would have earned only £300 in interest. If you pay tax on your interest, it would be even less. Plus, you'd still have to pay that £450 you didn't save on the mortgage.

With an offset mortgage you can choose to either lower monthly payments, or shorten the length of your mortgage term. The former allows you to reduce repayments, while the latter keeps your payments the same but gives you the chance to become mortgage-free earlier.

If you wish to discuss different types of mortgage, please get in touch. Initial discussions are free and there is no obligation.

Thank you.