What is the best way to use offset?

Posted on 28 July 2008

I currently have an offset mortgage with IF. I have approx £30k offsetting a mortgage of £69,000 (balance left to pay). Is it better to offset and save interest each month or would I be better off knocking nearly £30k off my overall mortgage? please protect my name if you post an answer on this website - you can send an e-mail to my web address if you would prefer - thank you in advance.

The joy of an Offset is that it is virtually the same. You are not paying interest on that £30K either way.

The added benefit of an Offset is that if you continue to pay the full monthly payments you will reduce your loan faster and save more interest. You would also have the flexibility of accessing your savings at a low cost should you wish.

IF have an online calculator with shows the pros and cons of the offset and how to use it to the maximum benefit. http://www.if.com/toolsandcalculators/offsetcalcpopup.aspx

Obviously it goes without saying that the faster you pay off your mortgage the cheaper it is overall.

Best Wishes

Bea

 

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