Why take an Offset Mortgage?

Of all the mortgages that are available the Offset Mortgage is probably the one that is least understood by the public but is probably the most flexible loan arrangement that you can have. If you are a sole trader, contractor, have significant savings or squirrel money away for the tax man then an Offset Mortgage is something that you should speak to your mortgage adviser about. There are many upsides to the product but many just focus on the fact that it is more expensive than a conventional mortgage. That as may be but placed in the right hands an Offset Mortgage can reduce the length of your mortgage or reduce your monthly payment.

The way an offset mortgage works is simple.

• A savings account is set up alongside your mortgage.

• Any Savings will "offset" your mortgage.

• You can deposit or withdraw at any time.

• Balance of savings deducted from your mortgage.

• Interest only charged on the balance

Mortgage is £200,000

£30,000 savings

You pay interest on £170,000

£200,000 - £30,000 = £170,000