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“Private Finance provided excellent service securing a remortgage for my property even though it was not a straight forward case. They always kept me updated and was on hand to help and deal with any issues arising. Would definitely recommend Private Finance for their services, offering guidance and support throughout the whole process.”
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“Private Finance provided excellent service securing a remortgage for my property even though it was not a straightforward case. They always kept me updated and was on hand to help and deal with any issues arising. Would definitely recommend Private Finance for their services, offering guidance and support throughout the whole process.”
“Professional and proactive advice and service – secured me an amazing rate on my mortgage. The team were great with their communication and I always felt confident that things were progressing – completely took away any anxiety from a stressful process!”
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With an offset mortgage, the balance of the savings held within your offset account is offset against your outstanding mortgage debt, reducing the amount of interest you pay on the mortgage.
This will enable you to clear your mortgage more quickly and pay less interest in the long run, while retaining access to your savings in case of emergency. With most offset accounts you can choose to either have smaller monthly payments or a shorter overall term.
Please remember your home may be repossessed if you do not keep up repayments on your mortgage.
Offset mortgages offer several advantages that can make them an attractive option for certain borrowers.
Introduced to the UK market in 2000, offset mortgages grew quickly in popularity in the beginning however, they have languished for many years after despite offering obvious advantages. They should logically be much more popular among more sophisticated borrowers, but suffer from a fatal marketing flaw: they sound complicated.
Key advantages include:
An offset mortgage allows you to have instant access to your money when required. This can be a great option in volatile times, for example for business owners who need quick access to cash.
Borrowers can make their savings work harder by offsetting them against their mortgage, thus reducing the interest paid. The mortgage can be cleared more quickly and pay less interest in the long run
For those going through retirement planning, offset mortgages can remove any cash flows issues and allow there to be more control as to when assets are liquidised. The timings at which you liquidise your assets are very important and offset mortgages can reduce the risk of crystallising your cash at a point in time when stock markets and investments are down.
While offset mortgages offer several advantages, it’s important to consider their potential disadvantages before deciding if they are the right option for you.
Not all lenders offer offset mortgages, which means your choice of lenders may be more limited. A mortgage specialist can help source the right offset mortgage for you. Your Private Finance consultant will explain offset mortgages in full to help you make an informed decision whether offset is right for you.
Is an offset mortgage for you? Offset mortgages are rarely promoted but offer concrete advantages that are worth checking out.
Offset mortgages are suitable for people who have substantial savings. Those savings will not earn you interest if you offset them, but they will save you from paying interest at the mortgage rate, which is generally higher than the savings rate after tax. For higher-rate taxpayers, offsetting against a mortgage can prove particularly efficient.
They are also of interest to individuals who have large annual bonuses as this can form part of an overall repayment strategy towards an interest-only mortgage.
Offset mortgages are particularly appealing for self-employed clients who often save their taxes throughout the year and then pay their tax bill in January. The tax they are saving throughout the year can be used to offset their mortgage, thereby reducing their monthly mortgage payments or term of the mortgage.
With our online mortgage tools, find the information you need using our helpful guides, information on the best mortgage rates and handy mortgage calculators.