The Sunday Times - With an offset mortgage you can beat those high rates . . . but you’ll need lots of cash
Homeowners trying to protect themselves from the latest rise in mortgage rates could take out an offset mortgage and use their savings to cushion the rise in repayments.
These deals reduce your monthly payments by offsetting your mortgage balance against money you put in a linked savings account. If you had a £200,000 mortgage and £20,000 in savings, for example, you would pay interest only on £180,000
“Most lenders do not like offsets because they do not make money on them when borrowers put in large payments to bring the interest down,” said Aaron Strutt from the mortgage broker Trinity Financial told The Sunday Times.
Mr Strutt added: “Many mortgage borrowers who want to switch to an offset deal will need to remortgage away from their current lender, because new rates are not always made available to existing customers.”
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