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Offset mortgages involve linking your mortgage to your savings account, reducing your overall interest payments. Your savings account and mortgage normally needs to be with the same bank/building society.
The total balance saved in your linked savings account is taken from what you owe on your mortgage. The amount left in your mortgage is then used to calculate a lower mortgage interest for you to pay.
To be clear, you don't use your savings to pay off some of your mortgage, but they help to lower the amount you pay interest on.
For example, you have a mortgage of £200,000 and a savings account with £20,000. With an offset mortgage, you'd only pay interest based on £180,000 of the mortgage. This means you could save up to 10% on the interest amount.
If you link your mortgage, you'll no longer earn interest on your savings account. But you might save more in interest with an offset mortgage than you’d earn on a savings account.
We've partnered with an expert broker to help borrowers save on their biggest monthly expense.
Just answer some questions about your situation and let Mojo's expert advisors guide you to a mortgage tailored to your needs. And the best part of it all is, it’s completely free (yes, really!).
With access to lenders across the whole of the market, they strive to save you money and time finding your best offset mortgage rate.
"Offset mortgages give you the best of both worlds: your savings stay accessible, but they also work behind the scenes to lower your mortgage interest. It’s a smart option for anyone who wants flexibility while still keeping their mortgage costs under control."
You can, and you won't get charged any interest at all on the months where 100% of your mortgage is offset by your savings.
There's usually no limit on how much you can offset from your savings account.
Most people pay tax on their savings unless it's an ISA account. For savers with an offset mortgage, the money is tax-free. When you have an offset mortgage, you won't earn any interest on your savings but you'll pay less interest on your mortgage.
It depends on your personal circumstances. If you have a bigger deposit, you might benefit from lower interest rates on your mortgage. But once you’ve put down the deposit you won’t be able to get it back.
With an offset mortgage you have savings for the future when you’ve paid off your mortgage. But if you withdraw from your savings before then, your monthly payments could increase.
You can speak to our broker partner, Mojo Mortgages, who can help compare the best offset mortgages for you against standard mortgages with the deposit you have.
YOU SHOULD THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME/PROPERTY. YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
The Financial Conduct Authority does not regulate mortgages for commercial or investment buy-to-let properties.
Confused.com is not a mortgage intermediary and makes introductions to Mojo Mortgages to provide mortgage solutions.
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Mojo is a trading style of Life's Great Limited which is registered in England and Wales (06246376). We are authorised and regulated by the Financial Conduct Authority and are on the Financial Services Register (478215). Mojo’s registered office is The Cooperage, 5 Copper Row, London, SE1 2LH.
To contact Mojo by phone, please call 0333 123 0012.
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