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Compare Offset Mortgages

With Offset mortgages, saving more could help you to make bigger savings on your mortgage payments, so choose a provider from our table and give them a call for the latest rates.

Off Set Mortgages

Lender
Mortgage Name
Type
Offer
Subsequent Rate
Cost for Comparison
Get Quote
Royal Bank Of Scotland Direct Offset Term Flexible £499 Fee
Tracker
4%
3.5% above Bank of England base rate
3.75% (variable)
3.70%
80%
£499
[+] View More
Application Criteria Fees and Charges
Existing Customers Only NO
Existing Borrowers Only NO
Remortgage YES
First Time Buyers YES
Home Movers NO
Minimum Deposit 20%
Max Mortgage Amount £1,000,000
Shared Ownership NO
Overpayments? YES
App Fee - Application Fee can be added to loan without conditions
Early Repayment Charge
NatWest Direct Offset Term Flexible £499 Fee Purchase
Tracker
4%
3.5% above Bank of England base rate
3.75% (variable)
3.70%
80%
£499
[+] View More
Application Criteria Fees and Charges
Existing Customers Only NO
Existing Borrowers Only NO
Remortgage NO
First Time Buyers YES
Home Movers NO
Minimum Deposit 20%
Max Mortgage Amount £1,000,000
Shared Ownership NO
Overpayments? YES
App Fee - Application Fee can be added to loan provided normal lending limits are met
Early Repayment Charge

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Your home may be repossessed if you do not keep up repayments on your mortgage. The rates and products displayed within these tables are updated on a regular basis however due to the dynamic nature of the market some product details and rates may be out of date. We therefore do not take any responsibility for the accuracy of the information supplied within the table although we will always make our best endeavour to ensure that the information provided is as accurate as possible. You should always check rates and terms with the product provider. The telephone-based mortgage advice service is provided by TurnKey Mortgages Limited. Registered office: St Crispins House, Duke Street, Norwich NR3 1PD. TurnKey Mortgages Limited are authorised and regulated by the Financial Conduct Authority. Their FCA number is 537424.

Offset Mortgages - What You Need To Know

What is an offset mortgage?

An 'offset' mortgage is a multifaceted type of mortgage that allows a homeowner to offset their savings against the value of their mortgage.

 

This doesn’t mean losing any savings - only any interest you would normally gain. Instead, offset mortgages use your savings to cut the amount of interest you pay on your mortgage.

 

How does an offset mortgage work?

If you had £10,000 in savings and a £120,000 home loan, this mortgage type allows you to offset these savings against the loan, meaning that you only pay interest on £110,000.

 

Consequently, more of your repayments go towards paying off the mortgage rather than the interest, so you can be free of your mortgage faster!

 

Some offset mortgages allow you to link a current account and savings balances to the mortgage. However, most only allow you to use your savings pot. These both work in the same way but are sometimes described differently.

 

There are similar mortgages available for first-time buyers that use savings as a bond to reduce the loan-to-value requirement.

 

The many efficiencies of offset mortgages

  • Efficiency Through Tax

Using your savings to offset a mortgage means that you avoid paying tax on your savings because you are no longer earning income from them.

 

  • Make More From Your Savings By Overpayment

The interest rate you are paying on your loan is likely to be much higher than the net returns you would receive from standard savings accounts - especially given the poor performance of the savings market right now.

 

So why not put your savings to better use by allowing them to reduce the interest-viable portion of your mortgage? The more you can offset this portion of the loan, the more you are effectively overpaying your mortgage, which could save you thousands of pounds in interest over the lifetime of the mortgage.

 

  • Flexible Link With Savings

Offset savings deposits are usually kept in a linked account so that interest can be calculated on the amount that is offset against your loan.

 

But this is usually flexible to your needs. So if you increase your deposits, the loan amount on which you pay interest will fall. If you need access to your savings in an emergency, it will simply increase the loan amount on which your interest is paid to reflect what is left in your account.

 

 

With providers all offering different deals, use Which4U's offset mortgage comparison to find yourself the best deal.

 

 

As always, we recommend that you seek professional advice if you are unsure which type of mortgage is right for you and that all of the information provided above is for use as an overview only and should not be the basis for your mortgage decision.

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