Offset Mortgages 

This type of mortgage is set up on the simple principle of ‘pooling’ all of your money into one place. Your lender will normally charge you interest on your mortgage balance, less any money you have in your current account and savings ‘pots’. Some lenders work on the principle of just having one account with a large ‘overdraft’ with your balance changing as money comes into your account and goes out again as you spend it. Due to the balances in your account, you can also choose if you want to reduce your monthly payments, or reduce the term of the mortgage.

Because most of these types of mortgage come with higher interest rates than traditional mortgages, this option usually works best with lenders who have higher levels of disposable income or large amounts of money in savings.

Repaying Your Interest Only Mortgage
Lump Sum or Regular Overpayments
Investment Vehicles

Return to mortgage types

The above advice was produced by Mr Manish Patel (BA hons), if you require any further information or have any questions regarding financial advice, please feel free to contact him. Email financial advisor

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