Mortgage Offset

Want higher, tax free interest from your savings - with no risk?  Do you have savings as well as a mortgage or long term loan secured on your house?  If the answer to both questions is "Yes", then and Offset Mortgage could be for you.

What is an Offset Mortgage? How does it work?  Interest rates you pay on your loans are generally much higher than those you receive on your savings.  You may also have to pay tax on the savings interest you receive.  With an Offset Mortgage, you receive no interest on your savings, but effectively, you use your savings to reduce the amount of the mortgage that you pay out interest on.  If the amount you owe is more than you have saved, then this means you effectively receive interest on your savings at the interest rate you pay on your mortgage - better still, because the savings interest is not paid to you (it reduces what you pay out on the mortgage) it may be tax free.

Why not simply use your savings to pay off some of the mortgage?  This may well be the best option - certainly it will leave you better off in the long term, but what if you need those savings in a hurry?  It won't be so easy to increase your mortgage quickly when the wolves are at the door!.  With an Offset Mortgage, you can use your savings to effectively pay off some of the mortgage, but still have access to them whenever you need to.

What are the drawbacks?  If you are planning to use interest on your savings to help build up your savings, an Offset Mortgage will not do this directly - instead it will reduce your debts faster or reduce your regular outgoings.  Offset Mortgages may not be at the most competitive rates. 

Compare rates for different Offset Mortgage suppliers.  Use mortgage calculators to work out how much your savings will be able to reduce your mortgage payment by.  Like the answer?  Apply on line for fastest results.

Able was I ere I saw Elba

Financial Information Services; Banks; Savings; Mortgages, Mortgage Calculator; Remortgaging

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