An Offset Mortgage - The Guide

An Offset Mortgage - The Guide

An Offset Mortgage - The Guide

AnOffset Mortgagewould allow you to use any savings or disposable income you may have against your Mortgage and pay less interest.

With an Offset Mortgage any savings or disposable income that you have would be applied to your mortgage balance lowering it. Due to the fact that your Mortgage balance is lower you will pay less interest over the course of your Mortgage.

For example, if you had a 100,000 Offset Mortgage and 10,000 in savings and you put that 10,000 into the bank account linked to your Mortgage, your Mortgage balance would be 90,000. As such, you would be paying interest on the 90,000 and not the 100,000 saving you money.

The Advantages of an Offset Mortgage

An Offset Mortgage could allow you to save thousands of pounds in interest while you have your Mortgage and even mean you pay your Mortgage off early if you use your income and savings wisely.

Many Offset Mortgage lenders will give you the facility to borrow back money that you have over-repaid, allow you to take Mortgage repayment breaks and allow you to pay your Mortgage off early without penalty. This flexibility can be a fantastic way to ensure that when your life takes twists and turns your mortgage does not stifle you. If you are at all unsure on Offset Mortgages you can obtainingindependent Mortgage advicefrom an Independent financial adviser which would mean you can be certain of just how flexible your Offset Mortgage really is.

The Disadvantages of an Offset Mortgage

Most Offset Mortgages have a higher interest rate than other types of Mortgage so if you take an Offset Mortgage and don't use your savings and income to full effect you could find that you end up paying more interest than with other types of Mortgage. This is why it is a great idea to search out independent Mortgage Advice prior to committing to an Offset Mortgage

Some people find Offset Mortgages difficult to understand and this is no surprise given their complex nature. As a result of this lack of understanding some people find that they have not being paying their Mortgage off as quickly as they expected. If you are thinking of getting an Offset Mortgage, you could talk to an Independent Financial Adviser and get some independent Mortgage advice so that you do not end up in this position.

An Offset Mortgage is very likely to have a variable interest rate, meaning that if rates go up your Mortgage repayments could go up too.It is important to calculate the effect any rate changes might have on your repayments. This will help you decide if you can cope with these fluctuations.

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