Offset Mortgages allow you to reduce the amount of interest charged on your mortgage, by linking it to a savings account or current account.
Sometimes referred to as an offset account, these mortgages work through your lender deducting the savings in your linked account from the outstanding mortgage balance. The interest for your mortgage is then charged on this net balance, instead of the total outstanding balance as in a conventional mortgage, saving you money on interest charges.
By paying less interest, you can then either afford to pay a lower monthly repayment compared to a normal mortgage, allow the money to be used elsewhere, or you can instead opt to make the same monthly payments as on a normal mortgage to pay it off faster, with a term reduction offset.
Available for purchases or remortgages, offset mortgages are an option to consider if you have a significant amount of cash savings already or are anticipating acquiring lump sums in the near future, saving you money over a conventional mortgage.