Offset mortgages sound like they are a flexible and easy way to lower your mortgage interest costs, keeping them to a minimum. It seems to be becoming more popular, about 8% of the total mortgage share are offset mortgages, that’s about 170,000 taken out in 2006.
So what is an offset mortgage? Basically it combines your savings account (and in some cases your current account as well) with your mortgage. The balance of your current and savings accounts will be offset against your mortgage balance and because interest is calculated on a daily basis you will pay less interest on your mortgage than you would normally.
You won’t receive any interest on the amount of savings you have, instead it will be discounted and taken off your mortgage payments instead. This proves to be pretty tax-efficient and can lead to a considerable saving off your repayments in the long run.
Read more about it at What Are Offset Mortgages?
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