MORTGAGE OPTIONS
Offset Mortgages
Link eligible savings to your mortgage so interest is charged on a lower effective balance.
How an offset mortgage works
An offset mortgage enables you to use savings held in a linked account to reduce the mortgage balance on which interest is calculated. For example, if you borrowed £200,000 and held £30,000 in linked savings, mortgage interest would usually be calculated on £170,000.
Potential benefits
- Reduce the interest charged on your mortgage
- Potentially reduce monthly payments or shorten the mortgage term, depending on the product
- Retain access to savings, subject to the lender’s account rules
Points to consider
Offset mortgage rates can be higher than standard mortgage deals and linked savings will usually not earn separate interest. The value of the benefit depends on the mortgage rate, the amount held in savings and how long those savings remain in the linked account.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
