Offset Mortgages

The Offset Mortgages refers to a type of mortgage that enables you to club your savings and mortgages into one account. This would enable you to bring down your interest rates as well as reduce the duration of the Offset Mortgages.

The best advantage of an Offset mortgage is that it puts your savings and current account against the mortgage. Your accounts, while they are there, bring down interest rates and also the duration of the Mortgage. The money in the account would not be used to pay off your debt. You would still be able to access it while it offsets your mortgage. It also implies that if you save more in your savings account, you save more overall as well. Offset mortgages give up to 95% loan to value. In standard borrowing you can take up to 3 to 4 times of one salary and almost 3 times of two salaries. The lenders have different borrowing limits.

Another advantage of an Offset mortgage is that the debit from your account would not be charged at loan or overdraft rates but at mortgage rates. There would also be no tax on the interest on your savings account. Some lenders even allow you to link your family member's savings account to your offset mortgage. They would be able to access their account but while the account is there, it would help in reducing interest rates and the duration of the loan.

There are many lenders who offer Offset Mortgages at competitive rates. It is recommended that you have a good savings account to get the maximum benefit from your mortgage.