OFFSET – MAKING YOUR MORTGAGE WORK HARDER

If you have both a mortgage and significant cash savings (£25,000 plus), you may with to consider an offset mortgage. This allows you to have a savings account that is linked to the mortgage account. You only pay interest on the difference between the two. For example, if your mortgage is £100,000 and your savings amount to £25,000, you only pay interest on £75,000. With savings rates being very low, this is a way of getting more out of your savings. With a mortgage rate of, say, 4.0%, it means that you are effectively getting a net 4.0% on your savings without risk.