Are Offset Mortgages Still Unfashionable?

Offset mortgages have been around for ages but its strange that a lot of homeowners and potential borrowers look at me as if I am crazy when i mention Offset mortgages.

These types of mortgages are great if you have money in savings so i will try and explain how these work, so i will not get anymore crazy looks.

Lets say you have a mortgage of £200,000 and £30,000 in savings that was being offset, then you would only pay interest on £170,000.

You may be thinking;

"Ok, whats the big deal, hardly a number cruncher!"

The chances are that the level of interest received on your savings are not attracting the levels of interest you are paying on your mortgage.

You may even think that if you have savings, why not use them to pay off a large part of your mortgage.

Thats true!  But what happens if you need to get hold of your savings?

With an offset mortgage, your savings are available, but offset while they are not being used providing you with some flexibility.

Even if you decided to use your savings to pay off part of your mortgage, you may think that you could either refinance or take out a further advance if you needed the money.  With these options, there are usually fees involved along with extra unneccessary hassle.

Before these deals did not look so competitive but recently I have noticed many new competitive deals coming on the market.

Another great advantage of an offset mortgage is that you can continuemaking the same normal monthly repayments rather than reducing this amount when offsetting. The Offset interest then goes towards reducing the term as you are effectively making overpayments.

With many lenders offering attractive Offset mortgages, now is certainly the time to consider offsetting your savings against your mortgage.

Offset mortgages can also help with Tax, as rather than earning interest by offsetting you are paying interest.

Something for you to think about..................