OFFSET MORTGAGES

An offset mortgage allows you to combine your mortgage and savings to make your money work harder. As your savings are linked to your mortgage, your money is used to notionally reduce the balance of your loan rather than earn savings interest. This is a great way to save as you reduce your mortgage interest which achieves a better and more tax efficient return than in most mainstream savings accounts. The reduction in mortgage interest means you make a proportionate overpayment each month, the effect of which will be to reduce your mortgage payments over the term from where they would otherwise have been*.

Who is an offset mortgage particularly useful for?

• have excess funds allowing you to save regularly 
• already have savings
• are looking to reduce your mortgage but the need for access to your savings prevents you doing so
• are a basic or higher rate tax payer
• have unpredictable cash flow – if you are self employed, receive occasional large bonuses or commission or work on highly-paid short–term contracts
• save regularly towards your annual tax bill     

How does an offset mortgage work?