Has anybody got a UK offset mortgage, this is where your savings and outstanding mortgage are combined to reduce your interest?
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Can you please let me know if this benefits you and is a good idea?
rossy300
1 year ago
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
many people have them, most dont use the facilities sufficiently to actually make a proper financial gain.
the rates on offset are not the lowest so if you are not using the features you are almost always better off taking a lower tracker.
many of my clients that have left offsets/current account mortgages have done so because they liked the idea of what they do but never used the functions and found it awkward to have everything lumped in.
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the rates on offset are not the lowest so if you are not using the features you are almost always better off taking a lower tracker.
many of my clients that have left offsets/current account mortgages have done so because they liked the idea of what they do but never used the functions and found it awkward to have everything lumped in.
Expert Financial Adviser Answer
Paul Ross DipPFS CII(MP&ER)
answered 1 year ago
This only benefits you if you intend to overpay and are determined to pay off the loan, as the interest rates are usually higher than tracker rates. The idea is great, but as Darren has mebtioned, most people rarely use the facility
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Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
When offset mortgages were first introduced they brought a welcome flexibility into the mortgage market, being particularly useful for those with a large amount on deposit who wished to keep their savings, rather than pay of their loan. They would also be useful for the (relatively few) people whose high incomes could be paid into the offset bank account.
As the other contributors have rightly pointed out, they do not have the best interest rates. Better products are are flexible, standard mortgages that allow you to make overpayments and subsequently to make underpayments, take payment holidays, and borrow back the overpaid amount. Since you are only charged interest on what is outstanding on your mortgage, this has the same effect as an offset account.
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As the other contributors have rightly pointed out, they do not have the best interest rates. Better products are are flexible, standard mortgages that allow you to make overpayments and subsequently to make underpayments, take payment holidays, and borrow back the overpaid amount. Since you are only charged interest on what is outstanding on your mortgage, this has the same effect as an offset account.