An Offset mortgage combines the borrower’s mortgage account with their savings/current account. All payments into the current/savings account can reduce the amount outstanding and the interest payable. The funds in the savings/current account offset the borrowings in the mortgage account.
Alternatively a Current Account Mortgage has one single account, which is the equivalent to a very large overdraft.
The main advantage is if the spending is minimised and within the agreed limit, the interest payable is considerably reduced. The interest is also tax free within an Offset mortgage.
The main drawback is some borrowers are uncomfortable with putting both mortgage and savings into the same basket. Some mortgage borrowers may also exceed the agreed spending limit as the monies are easily available, hence not reducing the mortgage amount owed.
If you require offset mortgage advice, please speak to one of our mortgage advisers. We have access to the whole mortgage market and as mortgage brokers we can search the right offset mortgage. We’re based in Vale Of Glamorgan and offer face to face appointments. We will go through your mortgage options.