Correct at 31/03/2020
If you’re looking for an offset mortgage to help you save money, we’re here to give you a hand.
At L&C, we’re experts in offset mortgages and can find the best deal on the market for you. See which deals you’re eligible for by using our online Mortgage Finder – it’ll compare over 80 lenders in real-time.
If you’d like to talk through the various offset mortgage options, or check whether this type of mortgage is the best choice for you, our advisers are available to provide expert advice and a dedicated case manager will support you through your application.
Our service won’t cost you a penny either, so get in touch now and see if an offset mortgage could be right for you.
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An offset mortgage allows you to link your savings or current account balances to your mortgage to help reduce the overall interest you pay.
You can still access your savings whenever you need to, but while they’re offset against your mortgage, if you add to or withdraw from the savings account then the interest charged will adjust accordingly.
So, for example, if you take out a £300,000 offset mortgage and have £50,000 in savings, you’d only have to pay interest on £250,000, which is the difference between the amount of savings you have and the amount you’re borrowing.
As you’re only being charged interest on a lower amount, you can then usually choose whether you want to reduce your monthly payments, or keep your payments the same and reduce the overall term of your mortgage.
Check our offset mortgage calculator to see how much you might be able to save.
Some lenders also provide family offset mortgages which enable parents, grandparents or other family members to help children trying to get on the property ladder by offsetting some of their savings against the amount borrowed.
You can read more in our guide ‘What is an offset mortgage?’
With an offset mortgage you can link your savings to your mortgage in order to reduce the amount of interest you’re charged. You’ll continue to have access to your savings when you need them.
If you have a large amount of savings, an offset mortgage may cost you less than a standard mortgage. It’s important to crunch the numbers carefully, or get a broker to do it for you, so you can be certain you’ve found the best deal. Our offset mortgage calculator can help you work out if this is the right deal for you.
Before April 2017, you could deduct interest on your mortgage payments from your rental income before you paid tax on it. However the percentage of your mortgage interest payments you can deduct has gradually been reduced, and as of April 2020, only basic rate (currently 20%) relief is available. You can read more in our guide on ‘Tax on Buy to Let properties’
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