How Do Offset Mortgages Work?

An offset mortgage is a mortgage with a savings/current account that’s linked to the mortgage account. This savings account is sometimes referred to as "offset account". Why would you want a savings account linked to your mortgage?

Because it can reduce the amount of interest you’re charged.

With an offset mortgage, the lender deducts the savings in your linked account from the outstanding mortgage balance to give a net balance. They then charge interest on this net balance, as opposed to the total outstanding mortgage balance – like they would with a normal mortgage.

You can benefit from the reduced interest charges in 2 main ways, you can either:

  • Make lower monthly payments with a payment reduction offset
  • Make the same monthly payments that you would on a normal mortgage, so that you essentially make overpayments on your mortgage and pay it off quicker, with a term reduction offset

Payment reduction offsets are available on both repayment and interest-only bases. Term reduction offsets are best applied to repayment mortgages.

Would You Benefit from an Offset?

Offset mortgages are particularly useful for people with significant amounts of savings – or those expecting to acquire some in the near future – who require a mortgage.  This could be for a purchase or remortgage. They're also effective for those wishing to overpay on their monthly payments, but who would also like access to those overpayments at any time.

Compare Offset Mortgage Rates and Deals

Use our offset mortgage comparison tool to compare all kinds of rates and deals.

Product Rate
Loan Type

Advanced filters

Edit Filters

We suggest you use our ‘True Cost Comparison’ filter. This allows you to accurately understand how different mortgages compare by ordering results based on the total cost over a ‘deal period’, such as a two, or five-year fixed rate mortgage.

Some low interest rate deals might seem attractive, but if fees are higher they might not be the best value for you. When comparing mortgage deals our true cost comparison factors the lender fees over the length of the deal as well as your monthly mortgage payments.

For example, if your repayments are £2,000 per month on a two-year fixed-rate mortgage, plus £500 in lender fees, the total cost of the deal is £48,500.

We've found 18 offset mortgage deals that match your search

Sort by

Scheme ID 22495
Initial rate 1.54% then 3.59% (variable) ?
Monthly repayments £ 1,205 ?
Type/Duration Variable ?
Scheme fees £1,784 ?
Cost comparison £30,715 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges £80, plus (1% in years 1-2) of the original balance on full redemption

Other info

Exit fees £80
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a tracker rate for 2 years at 1.54%, and then on a tracker rate for 23 years at 3.5900000000000003%. This would require 24 payments of £1,205.46 and 276 payments of £1,491.84. The total amount payable would be £442,543 made up of the loan amount plus interest (£140,759) and fees (£1,864 which includes exit fees of £80). The overall cost for comparison is 3.34% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 9765
Initial rate 1.84% then 3.59% (variable) ?
Monthly repayments £ 1,248 ?
Type/Duration Variable ?
Scheme fees £1,224 ?
Cost comparison £31,184 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 60%
Overpayments allowed? Yes
Early Repayment charges 2% in year 1, 1% until 30-11-22

Other info

Exit fees £0
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 1.84%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,248.32 and 274 payments of £1,493.98. The total amount payable would be £443,031 made up of the loan amount plus interest (£141,807) and fees (£1,224 which includes exit fees of £0). The overall cost for comparison is 3.35% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 9742
Initial rate 1.84% then 3.59% (variable) ?
Monthly repayments £ 1,248 ?
Type/Duration Variable ?
Scheme fees £1,199 ?
Cost comparison £31,159 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 60%
Overpayments allowed? Yes
Early Repayment charges 2% in year 1, 1% until 30-11-22

Other info

Exit fees £0
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 1.84%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,248.32 and 274 payments of £1,493.98. The total amount payable would be £443,006 made up of the loan amount plus interest (£141,807) and fees (£1,199 which includes exit fees of £0). The overall cost for comparison is 3.35% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 9743
Initial rate 1.84% then 3.59% (variable) ?
Monthly repayments £ 1,248 ?
Type/Duration Variable ?
Scheme fees £1,224 ?
Cost comparison £31,184 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 60%
Overpayments allowed? Yes
Early Repayment charges 2% in year 1, 1% until 30-11-22

Other info

Exit fees £0
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 1.84%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,248.32 and 274 payments of £1,493.98. The total amount payable would be £443,031 made up of the loan amount plus interest (£141,807) and fees (£1,224 which includes exit fees of £0). The overall cost for comparison is 3.35% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 9761
Initial rate 1.84% then 3.59% (variable) ?
Monthly repayments £ 1,248 ?
Type/Duration Variable ?
Scheme fees £1,199 ?
Cost comparison £31,159 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 60%
Overpayments allowed? Yes
Early Repayment charges 2% in year 1, 1% until 30-11-22

Other info

Exit fees £0
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 1.84%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,248.32 and 274 payments of £1,493.98. The total amount payable would be £443,006 made up of the loan amount plus interest (£141,807) and fees (£1,199 which includes exit fees of £0). The overall cost for comparison is 3.35% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 9746
Initial rate 1.94% then 3.59% (variable) ?
Monthly repayments £ 1,263 ?
Type/Duration Variable ?
Scheme fees £1,199 ?
Cost comparison £31,507 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges 2% in year 1, 1% until 30-11-22

Other info

Exit fees £0
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 1.94%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,262.82 and 274 payments of £1,495.36. The total amount payable would be £443,761 made up of the loan amount plus interest (£142,562) and fees (£1,199 which includes exit fees of £0). The overall cost for comparison is 3.37% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 9767
Initial rate 1.94% then 3.59% (variable) ?
Monthly repayments £ 1,263 ?
Type/Duration Variable ?
Scheme fees £1,199 ?
Cost comparison £31,507 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges 2% in year 1, 1% until 30-11-22

Other info

Exit fees £0
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 1.94%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,262.82 and 274 payments of £1,495.36. The total amount payable would be £443,761 made up of the loan amount plus interest (£142,562) and fees (£1,199 which includes exit fees of £0). The overall cost for comparison is 3.37% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 661
Initial rate 2.04% then 4.55% (variable) ?
Monthly repayments £ 1,277 ?
Type/Duration Variable ?
Scheme fees £1,589 ?
Cost comparison £32,247 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £0

Flexibility

Max LTV 80%
Overpayments allowed? Yes
Early Repayment charges Not Applicable

Other info

Exit fees £195
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a variable rate for 2 years and 2 months at 2.04%, and then on a variable rate for 22 years and 10 months at 4.55%. This would require 26 payments of £1,277.41 and 274 payments of £1,642.56. The total amount payable would be £485,058 made up of the loan amount plus interest (£183,469) and fees (£1,784 which includes exit fees of £195). The overall cost for comparison is 4.20% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 29976
Initial rate 2.28% then 4.49% (variable) ?
Monthly repayments £ 1,313 ?
Type/Duration Variable ?
Scheme fees £530 ?
Cost comparison £31,538 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £500

Flexibility

Max LTV 75%
Overpayments allowed? Yes
Early Repayment charges £90, plus (2.5% until 30-11-21, 1.5% until 30-11-22)

Other info

Exit fees £90
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 2.28%, then moving onto variable rate for 3 years at 4.25%, and then on a variable rate for 19 years and 10 months at 4.49%. This would require 26 payments of £1,312.85, followed by 36 payments of £1,599.62, and 238 payments of £1,632.65. The total amount payable would be £480,411 made up of the loan amount plus interest (£179,881) and fees (£620 which includes exit fees of £90). The overall cost for comparison is 4.10% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 29988
Initial rate 2.4% then 4.49% (variable) ?
Monthly repayments £ 1,331 ?
Type/Duration Variable ?
Scheme fees £530 ?
Cost comparison £31,969 ?

Fees & Charges

Booking fees £0
Arrangement fees £0
Valuation fees £0
Other fees £0
Cashback £500

Flexibility

Max LTV 80%
Overpayments allowed? Yes
Early Repayment charges £90, plus (2.5% until 30-11-21, 1.5% until 30-11-22)

Other info

Exit fees £90
Basic legals £0

Representative example: A mortgage of £300,000 payable over 25 years on a repayment basis, initially on a fixed rate for 2 years and 2 months at 2.4%, then moving onto variable rate for 3 years at 4.25%, and then on a variable rate for 19 years and 10 months at 4.49%. This would require 26 payments of £1,330.79, followed by 36 payments of £1,601.32, and 238 payments of £1,634.38. The total amount payable would be £481,350 made up of the loan amount plus interest (£180,820) and fees (£620 which includes exit fees of £90). The overall cost for comparison is 4.13% APRC representative.

0344 346 3672 or Enquire now

View more mortgages

How Can John Charcol Help You?

We Take Care of Everything

With over 45 years of service, we've seen it all. We can save you money, time and make buying your property easy.

We're Highly Recommended

We have over 1,500 5* reviews on reviews.co.uk, so you can feel confident that your mortgage is in the right hands.

We Give Personal, Expert Advice

We work around your schedule to help you arrange a mortgage that suits your circumstances, no matter how complex.

Process for Buying a Home/Remortgaging

1. First Conversation with Adviser

When you phone us, you can either arrange a phone appointment with your adviser or a face-to-face meeting – whatever suits you. Your adviser will ask you some questions then go away and find you the best deal for your circumstances and future needs. They’ll organise a follow up during which they’ll present you with what they’ve found.

2. Decision in Principle

Once you’re happy with their recommendation, they’ll go about securing your DIP (Decision in Principle) - which is basically a promise from the lender that they’ll loan you money on the condition that the information you’ve provided is correct and subject to a valuation of the property.

3. Offer on Property/Remortgaging

After the lender has agreed your scenario, you’ll be in a position to make an offer on a property or move forward with the remortgaging.

4. Pre-Application and Submission

Following the acceptance of your offer, we’ll send you some information which explains all the documents we need to submit to the lender. You’ll be assigned a client relationship manager who’ll check and submit certified copies of your documents; they’ll liaise with both you and the lender. Your adviser will then submit the fully packaged mortgage application.

5. Lender Underwriting and Valuation

The lender will underwrite your application; this basically means they’ll verify that the information you’ve provided is correct and review all your documents for themselves. They’ll also instruct a valuation for their purposes on the property to make sure there are no significant problems with it.

6. Mortgage Offer

If the lender is happy with everything they’ve found, they’ll send you a mortgage offer. They’ll also send us a copy.

7. Conveyancing

After you’ve accepted your mortgage offer, you’ll go through the legal part of the process, known as conveyancing. This is where the solicitors/conveyancers draw up contracts and organise the actual, legal purchase of the property/remortgaging. If buying, you’ll also need to arrange buildings insurance at this stage, making sure it’s in place from exchange.

8. Exchange and Completion

If you’re buying a property, your conveyancer/solicitor will exchange contracts with the seller’s conveyancer/solicitor; it’s at this point that you would put down your deposit and be legally bound to the property. The purchase will complete when the money is transferred on an agreed-upon date. If you’re remortgaging, then your conveyancer/solicitor will set a date to draw down the funds and pay off any existing lender(s) once the mortgage offer’s released.

Things to Consider When Taking Out an Offset Mortgage

Whilst every offset product achieves the same goal in principle, there are some subtle differences between lenders.

A few of the main differences include:

  • The number of accounts that can be linked to your mortgage
  • Some lenders will accept savings from a family member to be offset against the mortgage, subject to specific requirements
  • The type and notice arrangements of these accounts
  • The access you have to your savings should you need them
  • The offset products they offer, whether it’s payment reduction, term reduction or both

Your mortgage adviser can go through the products available with you.

Offset FAQs

Can I Get a Buy-to-Let Offset Mortgage?

It is possible to get an offset mortgage or remortgage on a buy-to-let property, but they're quite rare.

Are Offsets Only for Higher Rate Taxpayers?

Although offset products come with strong benefits for higher rate taxpayers, all offset borrowers will benefit from the ability to reduce their mortgage terms or monthly payments.

Can I Get an Interest-Only Offset Mortgage?

You can get an interest-only offset mortgage, but this only really works for payment reduction. It's possible to take out interest-only offsets for residential purchases and remortgages, as well as buy-to-let purchases and remortgages.

Do Offsets Cost More?

Offset products tend to come with slightly higher rates than normal mortgages, although the fees are generally the same. Nonetheless, the benefits that come with the linked savings account more than make up for any extra cost.

Insurance

We can find you bespoke buildings and contents insurance, whether you’re buying a new property or you’re remortgaging and want a new plan.

Learn More

Protection

It’s important to protect your home and family against the unforeseen. We can arrange protection cover tailored to your needs.

Learn More

JC Legal

There are a lot of things to organise when you buy a property, besides your mortgage. With JC Legal, we can refer you to a solicitor from our carefully selected panel, so you have one less thing to do.

Learn More

Concierge

We don’t just find you a mortgage. We help you right up to the day you move in. With our exclusive and free Concierge Service, we can arrange removals, set up utilities, register for Council Tax and more.

Learn More

You are currently offline. Some pages or content may fail to load.