A Mortgage Now - Offset Mortgages
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What are offset mortgages? |
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Offset mortgages are mortgage arrangements that operate alongside a savings or current bank account. The funds held in your bank account are ‘offset’ against your outstanding mortgage balance leaving you paying mortgage interest only on the net balance between the two figures.
For example, if your outstanding mortgage were £200,000 and you held £20,000 in your bank account you would be offsetting £20,000 and paying mortgage interest on just £180,000. |
What are the advantages of offset mortgages? |
| Offset mortgages are an excellent way of reducing the time it takes to pay off your mortgage loan. The self employed find these products especially beneficial as they can offset funds against their mortgage when cashflow is good and put the funds back in their business during leaner times. |
Are flexible mortgages the same as offset mortgages? |
| Flexible mortgages have ‘flexible’ features in that you can overpay or underpay the mortgage without penalty, but they may not have a true offset bank account facility. Speak to our mortgage advisers to establish exactly which features you will need for your own circumstances. They can then help you to decide which product is right for you. |
Who should consider offset mortgages? |
Offset or flexible mortgages should be considered if you are:
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