If you own a home and have some savings, then an offset mortgage could make your savings work for you – and save you money into the bargain. An offset mortgage is one of a new kind of mortgage that offers flexibility to homeowners.
Offset mortgages work by allowing you to offset your credit balances on some accounts against the debt balances on others. For example, if you have an outstanding mortgage loan of £100,000 and you have £10,000 in savings, offset mortgage providers will allow you to pay interest only on the total amount of debt. This means that you will pay interest on £90,000 instead of on the full amount as with a standard mortgage. Over the course of time, this can save you a great deal of money in interest payments.
The same principle applies to credit card balances and current accounts. As part of an offset mortgage, with some lenders you can offset the credit balance in your current account against the debt balance on your credit card and pay interest only on the total amount of debt you owe. What is more, you can repay the interest at the lower mortgage interest rate rather then the standard annual percentage rate (APR) of the credit card*.
When looking out for best offset mortgages it is natural to make offset mortgages comparisons. With the help of a professional mortgage adviser you look at every deal you can, assess its positives and its negatives and then compare them with what you need to get from your mortgage. But by doing this, you will see that by using a professional, whole of market adviser any offset mortgages comparisons will be an exercise in finding a mortgage to fit round your needs rather than fitting your life round a mortgage.
Whole of market offset mortgages comparisons mean every single offset mortgage is assessed. In the UK there are a number of offset mortgage providers, both banks and building societies, all offering a host of variations on the theme. If you go directly to any one of these mortgage providers they will only be able to offer you their range, which may only be a handful of different deals. But whole of market means you can see all the deals, both direct deals and deals that only a mortgage intermediary can offer and you can find the one deal that fits. There are so many different facets of offset mortgages comparisons you need as much variation as possible to make a decent judgement.
The facets of offset mortgages comparisons are endless – there are the loan to value ratios, which are then linked to the different rates. The rates could be fixed, trackers or variables, and they could also be based on different loan to income ratios. There are then differences in offset deals, whether they are linked to savings accounts or just a single large current account. Then there are the differences in overpayment functions, underpayment functions, payment breaks, introduction offers, fees, redemption charges, and administration charges. There are more things to consider when it comes to offset mortgages comparisons, but it’s safe to say that when everything is taken into account, there is a lot to consider.
So every single offset mortgage is, in a way, a unique mortgage if it is done properly with offset mortgages comparisons. With the help of a mortgage adviser the single best deal is chosen, and that can then be calibrated to work with your lifestyle and your savings. Brokers can sometimes even help create custom-made deals if they have a good relationship with the lender of offset. Offset mortgages comparisons are key to all this because only through a rigorous whole of market process can the single best deal be found.
So talk to a mortgage adviser as soon as possible if you are considering offset mortgages. They will be able to assess you, your life and then assess the entire offset mortgage market with thorough offset mortgages comparisons. They will use their qualifications, experience and knowledge to sort the wheat from the chaff and find a mortgage that will make your money work hard and will save you money. Offset mortgages comparisons don’t take a long time, doesn’t cost you a penny and will guarantee a mortgage that’s right for you.