Offset Mortgages
An offset mortgage offsets the amount in your savings and current
accounts from the interest on your mortgage.
This provides you with an opportunity to pay off your mortgage
quicker and cheaper. However, you won't receive any of the
interest on your savings account or current account.
Base rates are currently low, which means that instead
of getting small amounts of interest on your bank accounts,
they work to reduce your mortgage payments, helping you
to get it paid off sooner.
If you have other debts, including credit cards and personal
loans, etc. These can all be repayed at the mortgage rate,
which will probably be lower than the rate on those borrowings.
Another advantage is that credit cards and loans remain
unsecured borrowings, despite being paid off at the mortgage
rate.
It is important to remember that by consolidating debts
into your offset mortgage, you are changing your short-term
debt into long-term debt, so you should ensure these are
paid off sooner rather than later, otherwise it will cost
more in the long run.
Basically, you are pouring your savings into your mortgage
in order to pay it off, without sacrificing easy access
to the accounts, and the funds. It is expected that by 2005,
offset mortgages will represent a quarter of the mortgage
market.
Those who have large savings accounts will find offset
mortgages useful, as well as those with variable incomes,
such as the self employed.
To apply for an offset mortgage, simply click the button
below.
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