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.
"Offsetting your savings against your mortgage can be a useful way to reduce your interest payments. But make sure you wouldn't benefit more by putting your money in a separate savings account with a decent interest rate."
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.
If you're looking for buy-to-let mortgages, there are some lenders who offer offset deals. But the options may be limited and there could be a strict eligibility criteria.
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.
Confused.com and Mojo Mortgages are part of the same group of companies.Confused.com 2nd Floor, Greyfriars House, Greyfriars Road, Cardiff, CF10 3AL, United Kingdom. Confused.com is a trading name of Inspop.com Limited and is authorised and regulated by the Financial Conduct Authority. FRN 310635
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, and head office is WeWork No. 1 Spinningfields, Quay Street, Manchester, M3 3JE.
To contact Mojo by phone, please call 0333 123 0012.
cookie usage
We use cookies, some of which are essential to make our website work. For us to use our non-essential cookies, we need your consent. You can consent by accepting all or alternatively, manage your cookies at any time. For more information, read our cookie policy.
