Offset Mortgages
Use your savings to reduce the interest you pay with offset mortgages.
An offset mortgage is a type of mortgage linked to one of your savings accounts, and then the money in your savings account is used to lower the interest charged on your monthly repayments.
Example: If you have a £250,000 mortgage and £50,000 in your savings account, you will only pay interest on the £200,000 instead of the total £250,000.
please note that the savings that are offset against your mortgage will not earn any interest.
What are the advantages?
- Flexibility – Your savings can still be accessed.
- Decrease the interest paid – Using your savings to offset the interest paid on your mortgage and then this will reduce your monthly repayments.
- Tax Advantages – No tax is paid on the interest savings.
What are the disadvantages?
- No interest received from your savings – This is because you are benefiting from a lower amount of interest.
- Reduced choice of lenders – Not all lenders have offset mortgage products.
- A larger deposit is usually needed – a 25% deposit is usually needed.
Offset Mortgages FAQ's
Using your savings to offset against your mortgage will reduce the interest you pay and, therefore, reduce your monthly repayments.
Yes, you can deposit and withdraw from the savings account linked to your offset mortgage. Please note, that if you withdraw money from the savings account then the amount of interest you pay will increase, and this will increase your repayments. Still have a question? Contact us and we can help.
Depending on which lender you are with. Some lenders offer products with fees, without fees. This is where advice from an expert adviser is very beneficial. Contact us and we can help you navigate the right option for you, or try a free offset mortgage calculator.
Yes, this is possible. A larger deposit is normally needed for an offset mortgage so please get advice on the right mortgage products for you. Download our FREE guide to buying your first home
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