If you've got money sitting in a saving account, an offset mortgage could be a good option to allow you to use your savings and offset them against the amount you owe on your mortgage.
As an example, if you have a £200,000 mortgage and £40,000 in savings offset against it, you would only pay interest on £160,000. But your monthly mortgage payments will, most likely, be based on the full £200,000 loan. That means that you are effectively over paying you mortgage each month. Offset mortgages allow you to pay less interest on your mortgage, while allowing you to potentially pay your mortgage off quicker.
Offset mortgages allow you to have easy access to your savings while reducing how much interest you pay on your mortgage loan. Some lenders will allow you to reduce your monthly payments so the amount you pay is based on the value of the outstanding mortgage minus the money offset in savings. In this circumstance it could help bring down your repayment but won't allow you to pay off your mortgage faster.
Before you decide to opt for one of the mortgage options below, it's important to speak with an independent mortgage expert. Our advisers at John Charcol will be able to assist you in comparing products from across the mortgage market to help you decide which mortgage is best for you. If you could be better off taking out another offset mortgage or if a different mortgage product would be more beneficial to you and your personal situation our experts will advise you.
Need some advice?
Send us your details and we will help find the mortgage that's right for you: