An Offset Mortgage offers consumers lower interest rates, leading to significant savings. This type of mortgage allows the borrower to utilize the funds in their savings or current account to decrease their interest payments. The borrower has the freedom to link as many savings/current accounts to their offset mortgage as necessary, working to reduce the interest rate. The interest is only applied to the remaining loan balance after the amount in the linked accounts is subtracted.
The Offset Mortgage has rapidly grown in popularity due to its immense flexibility. Current data reveals that about 10 percent of people have availed an offset loan against their savings and current accounts. This mortgage type allows for overpayments when possible, and occasional underpayments if overpayments have been previously made. There’s also a credit limit feature on offset mortgages, which determines the mortgage credit limit based on the equity in the property, acting like a loan facility.
Given the ongoing market fluctuations, securing a beneficial offset mortgage deal could be a wise investment, helping you save and fund other ventures. Offset mortgages also provide a safety net for any possible financial difficulties. This mortgage type is most suitable for individuals with savings of at least 8 percent of the total mortgage value.
