Offset mortgages
If you borrow via a mortgage there is also the chance that you have savings so how about using your savings, however small, to reduce the debt of your mortgage?
In our low interest rate world your savings may be earning less than the amount you are paying in interest on you mortgage; an offset mortgage works with this to your advantage.
Kept in separate accounts an offset deposit account can be linked to you mortgages for the purposes of interest calculation.
So by putting more money into deposit your balance is decreased but if you take it out then it becomes larger.
So let's try to put this into practical terms using the Current Account off set mortgage as an example. Let us say you have £3,000 in your off set mortgage current account. Now let's say you have a mortgage of £100,000, your account will show you have a balance of £97,000 overdrawn. This is the amount interest will be charged on.
As the balance is calculated on a daily basis you will only be paying interest on the amount owed. It is often possible to also transfer other debts, like personal loans or credit cards, to this account and pay an often lower interest rate than these loans would normally require.
This is a very brief look at Off Set mortgages there are bound to be other aspects that are not covered here. So please get in touch with us so we can keep you up to date with all the elements of an Offset mortgage. For advice on investments we act as introducers.
For Solicitors we act as introducers only
FCA does not regulate Solicitors
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBTS SECURED ON IT.
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