UK Mortgages: Offset Mortgages Growing in Popularity
UK Mortgages: Offset Mortgages Now Available
In the current economic climate, banks are beginning to compete to attract barrowers and their money. One way they are doing this is by offering UK mortgage deals like an offset mortgage. What is an offset mortgage?
An offset mortgage allows you to leverage the money you’ve saved and set it against the home loan. In some ways, this is a sort of interest swap, meaning you are saving interest on the home mortgage instead of accruing interest on the savings account. As a result, you are not required to pay a tax on the gains.
Offset mortgages are especially appealing for barrowers in the higher tax brackets. An offset mortgage may also help the barrower to repay the mortgage more quickly than a fixed rate mortgage, which makes the offset mortgage especially appealing.
Several banks have begun to offer both fixed and variable offset mortgages that are competitive with other UK mortgage offers. Another appealing aspect of offset mortgages is that the interest is not calculated on a monthly basis like most mortgages, but rather on a daily basis. Calculating the interest on a daily basis is beneficial to the barrower as it significantly reduces the overall interest amount.
For barrowers in the higher tax brackets, an offset mortgage makes a lot of financial sense. In addition, offset mortgages provide significant benefits for those who are self-employed. A broker can help you determine which UK mortgage offers suit your specific circumstances.
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