Offset Mortgages

This is allows a borrower to keep balances (for example - current account, savings account and outstanding mortgage)  in separate accounts.

For the purposes of interest calculation, all balances are added together as one total. Interest is only charged on the outstanding amount, meaning interest payments are reduced.

Advantages are that your mortgage will be paid off quicker as you pay less interest, no tax paid on interest with savings-if applicable), able to withdraw funds, take breaks from mortgage payments and make lump-sum payments. One downside is that usually the interest rate is not the best rate available.

This type of mortgage is best suited to people with large amounts of money in their savings or current accounts.