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Offset Mortgage Deals

 

Did you know that there is a way to leverage your savings account against your mortgage loan and save yourself some money on interest charges? By using an offset mortgage deal, you can offset the amount of money that you pay interest on. This is how it works; if you have a savings account, the amount you have in your savings offsets the amount of money that you pay interest on in your mortgage. An example would be as follows; suppose you have £ 20000 in your savings account and you owe £ 110000 on your mortgage loan, you would only have to pay interest on £90000 of your mortgage. Offset mortgage deals lets the borrower reduce the amount of debt that they pay interest on in relation to the amount of money that they have in their savings account.

Offset mortgage deals can also be used to help you save money on credit card debt. Some lenders allow you to use an offset mortgage deal to leverage the balance in your current account against your credit card debt balance and pay interest only on the difference between your current account credit balance and your credit card debt. In addition, you can pay the interest back at your mortgage rate instead of at the credit card’s annual percentage rate.

The interest rate for offset mortgages is usually higher than the rates for standard mortgages, are for the most part variable, and tend to go up and down with the Bank of England’s base rate. However, most borrowers who utilize their offset mortgages to get the maximum benefits possible are able to pay off their mortgages quicker and not have to pay as much interest.

Therefore, if you have a savings account and a mortgage, then you might want to consider an offset mortgage deal. You might be able to save yourself some money and get out of debt quicker too.

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