According to the Council of Mortgage Lenders Offset mortgages are growing in popularity with around 7% of all new lending last year, which equates to around 170,000 Offset mortgages or £29 billion in lending.
What is an Offset Mortgage?
With an offset mortgage you combine your savings with your mortgage account; the lender then calculates the net borrowing on your mortgage minus your savings and charges interest on the reduced sum.
For example if you had a £150,000 mortgage with savings of £20,000 you would only pay interest on £130,000. With this type of mortgage you also get the option to make overpayments or underpayment, which keeps payment options flexible.
According to the Yorkshire Bank, it suggests these type of mortgages could be advantageous to around three in ten borrowers in the UK, which equates to around 4 million people.
Offset mortgages are not suitable for everyone and I would recommend you seek advice from a qualified independent mortgage broker or IFA who will be able to advise you.
We have helped thousands of UK people obtain advice on Remortgages.
We Believe the Best Advice is 'Independent' Advic
- Beat the next interest rate raise
There has been much speculation in the press about the possible rise in interest rates next month. Some lenders have started to withdraw fixed rate.... - Sharp rise in the number of properties coming onto the market
Figures from estate agents show an average of a 10% rise in the number of housing stock on their books which is the largest rise.... - Council tax bills have risen by 91% in last ten years
Figures published by the Halifax building society show that over the past ten years the average council tax bill has risen 91%, while average earnings.... - Social housing budget to go up buy 50%
Speaking on BBC’s Politics show the soon to be prime minister Gordon Brown pledged that the government would look to address the current housing crises....