Offset Mortgages

Offset mortgages are a slight variation on the current account mortgage (CAM), in which your main current account or savings account (or both) are linked to your mortgage and are offset against the mortgage sum. So as your current account and savings balances go up, you pay less on your mortgage. As they go down, you pay more.

This means that if you have a mortgage of £250,000 and savings of £25,000, you will pay interest on only £225,000 and will repay your mortgage quicker. No interest is paid on your savings, but you will save money on the mortgage interest.

An offset account may be a good choice for you if you are a higher rate taxpayer or have substantial savings to offset. However, if after paying your deposit you don't have much left in savings, you may find that other mortgages may be more suitable; for example those with a lower interest rate or other features that are more important to you.