How many lenders provide offset mortgages?
Homeowners can potentially save thousands of pounds in interest payments with offset mortgages, but many lenders do not provide them.
At the moment there are approximately ten lenders are offering offset mortgages.
The most well-known banks and building societies providing them include Accord Mortgages, Barclays, Clydesdale Bank, Coventry for Intermediares, Family Building Society and Scottish Widows.
For wealthier clients looking for larger mortgage loans, Coutts also has some offset mortgages.
Aaron Strutt, product director at Trinity Financial, says: "With so many homeowners making overpayments on their mortgage, offset mortgages should be more popular. They are great for the self-employed, higher earners and borrowers with variable incomes.
"An offset mortgage effectively lets borrowers use their savings and potentially their current account credit to reduce the amount on which interest is charged on their mortgage repayments and therefore the interest they incur."
Offset mortgages do not suit everyone, so they aren’t always applicable to every borrower. For example, if a first-time buyer with no savings is looking for the lowest possible rate, an offset is unlikely to be the right deal for them.
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The information contained within this article was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
Borrowers will not earn any interest on savings or current accounts linked to their offset mortgage.
Instead of earning interest, they save paying interest on their mortgage balance.
For example, if you have a £100,000 offset mortgage and £20,000 in a linked savings account, you will only pay interest on the £80,000 difference.
If your savings grow, the mortgage payments won’t change and more of the monthly repayment will go towards paying off their mortgage balance.
Customers save money on the interest charged on their mortgage and, if they have a repayment mortgage, it may help them to reduce their term.
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