What Is an Offset Mortgage?

An offset mortgage is a mortgage with a savings/current account that’s linked to the mortgage 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 only available as repayment mortgages.

Would You Benefit from an Offset Mortgage?

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 purchase or remortgage.

Compare Offset Mortgage Rates and Deals

You can compare offset mortgage rates currently on the market right now with our free best buy tool.

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We recommend you sort by True Cost Comparison find out more

We recommend you sort by True Cost Comparison

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 16 offset mortgage deals that match your search

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Scheme ID 83796
Initial rate 1.33% then 4.49% (variable) ?
Monthly repayments £ 1,176 ?
Type/Duration Variable ?
Scheme fees £1,007 ?
Cost comparison £29,231 ?

Fees & Charges

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

Flexibility

Max LTV 65%
Overpayments allowed? Yes
Early Repayment charges £125, plus (2% until 30-06-21, 1% until 30-06-22)

Other info

Exit fees £125
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 at 1.33%, then moving onto variable rate for 3 years at 3.99%, and then on a variable rate for 20 years at 4.49%. This would require 24 payments of £1,176.00, followed by 36 payments of £1,548.99, and 240 payments of £1,617.19. The total amount payable would be £473,245 made up of the loan amount plus interest (£172,238) and fees (£1,132 which includes exit fees of £125). The overall cost for comparison is 3.92% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 83802
Initial rate 1.4% then 4.49% (variable) ?
Monthly repayments £ 1,186 ?
Type/Duration Variable ?
Scheme fees £1,007 ?
Cost comparison £29,465 ?

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 £125, plus (2% until 30-06-21, 1% until 30-06-22)

Other info

Exit fees £125
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 at 1.4%, then moving onto variable rate for 3 years at 3.99%, and then on a variable rate for 20 years at 4.49%. This would require 24 payments of £1,185.76, followed by 36 payments of £1,549.96, and 240 payments of £1,618.20. The total amount payable would be £473,757 made up of the loan amount plus interest (£172,750) and fees (£1,132 which includes exit fees of £125). The overall cost for comparison is 3.93% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 83805
Initial rate 1.59% then 4.49% (variable) ?
Monthly repayments £ 1,213 ?
Type/Duration Variable ?
Scheme fees £1,007 ?
Cost comparison £30,108 ?

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 £125, plus (2% until 30-06-21, 1% until 30-06-22)

Other info

Exit fees £125
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 at 1.59%, then moving onto variable rate for 3 years at 3.99%, and then on a variable rate for 20 years at 4.49%. This would require 24 payments of £1,212.54, followed by 36 payments of £1,552.55, and 240 payments of £1,620.90. The total amount payable would be £475,141 made up of the loan amount plus interest (£174,134) and fees (£1,132 which includes exit fees of £125). The overall cost for comparison is 3.96% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 71817
Initial rate 1.59% then 3.59% (variable) ?
Monthly repayments £ 1,213 ?
Type/Duration Variable ?
Scheme fees £1,224 ?
Cost comparison £30,325 ?

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 31-08-22

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 1.59%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,212.54 and 274 payments of £1,490.49. The total amount payable would be £441,144 made up of the loan amount plus interest (£139,920) and fees (£1,224 which includes exit fees of £0). The overall cost for comparison is 3.30% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 71824
Initial rate 1.59% then 3.59% (variable) ?
Monthly repayments £ 1,213 ?
Type/Duration Variable ?
Scheme fees £1,224 ?
Cost comparison £30,325 ?

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 31-08-22

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 1.59%, and then on a variable rate for 22 years and 10 months at 3.59%. This would require 26 payments of £1,212.54 and 274 payments of £1,490.49. The total amount payable would be £441,144 made up of the loan amount plus interest (£139,920) and fees (£1,224 which includes exit fees of £0). The overall cost for comparison is 3.30% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 83799
Initial rate 1.73% then 4.49% (variable) ?
Monthly repayments £ 1,232 ?
Type/Duration Variable ?
Scheme fees £8 ?
Cost comparison £29,588 ?

Fees & Charges

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

Flexibility

Max LTV 65%
Overpayments allowed? Yes
Early Repayment charges £125, plus (2% until 30-06-21, 1% until 30-06-22)

Other info

Exit fees £125
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 at 1.73%, then moving onto variable rate for 3 years at 3.99%, and then on a variable rate for 20 years at 4.49%. This would require 24 payments of £1,232.50, followed by 36 payments of £1,554.43, and 240 payments of £1,622.87. The total amount payable would be £475,161 made up of the loan amount plus interest (£175,153) and fees (£133 which includes exit fees of £125). The overall cost for comparison is 3.96% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 83783
Initial rate 1.85% then 4.49% (variable) ?
Monthly repayments £ 1,250 ?
Type/Duration Variable ?
Scheme fees £1,007 ?
Cost comparison £31,001 ?

Fees & Charges

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

Flexibility

Max LTV 85%
Overpayments allowed? Yes
Early Repayment charges £125, plus (2% until 30-06-21, 1% until 30-06-22)

Other info

Exit fees £125
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 at 1.85%, then moving onto variable rate for 3 years at 3.99%, and then on a variable rate for 20 years at 4.49%. This would require 24 payments of £1,249.77, followed by 36 payments of £1,556.03, and 240 payments of £1,624.54. The total amount payable would be £477,033 made up of the loan amount plus interest (£176,026) and fees (£1,132 which includes exit fees of £125). The overall cost for comparison is 4.01% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 89311
Initial rate 2.03% then 4.49% (variable) ?
Monthly repayments £ 1,276 ?
Type/Duration Variable ?
Scheme fees £530 ?
Cost comparison £30,653 ?

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 30-09-21, 1.5% until 30-09-22)

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 3 months at 2.03%, then moving onto variable rate for 3 years at 4.25%, and then on a variable rate for 19 years and 9 months at 4.49%. This would require 27 payments of £1,275.95, followed by 36 payments of £1,594.91, and 237 payments of £1,627.72. The total amount payable would be £477,757 made up of the loan amount plus interest (£177,227) and fees (£620 which includes exit fees of £90). The overall cost for comparison is 4.04% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 89253
Initial rate 2.04% then 4.55% (variable) ?
Monthly repayments £ 1,277 ?
Type/Duration Variable ?
Scheme fees £1,039 ?
Cost comparison £31,697 ?

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 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 £484,508 made up of the loan amount plus interest (£183,469) and fees (£1,234 which includes exit fees of £195). The overall cost for comparison is 4.18% APRC representative.

0344 346 3672 or Enquire now

Scheme ID 89259
Initial rate 2.14% then 4.55% (variable) ?
Monthly repayments £ 1,292 ?
Type/Duration Variable ?
Scheme fees £1,039 ?
Cost comparison £32,050 ?

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 2.1399999999999997%, and then on a variable rate for 22 years and 10 months at 4.55%. This would require 26 payments of £1,292.11 and 274 payments of £1,644.04. The total amount payable would be £485,296 made up of the loan amount plus interest (£184,257) and fees (£1,234 which includes exit fees of £195). The overall cost for comparison is 4.20% APRC representative.

0344 346 3672 or Enquire now

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How Can John Charcol Help You Find an Offset Mortgage?

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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

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 you want to buy to make sure there are no significant problems with the property and that it’s worth the amount you want to borrow.

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 mortgage 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.

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.

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Protection

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

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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.

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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.

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