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EXPERT ADVICE

How do offset mortgages work? Who can set up an offset mortgage?
You may need to be at a certain stage of your In the current climate,
financial life to be suitable but professionals,
Lisa Bell, Independent Mortgage Adviser at ESPC Mortgages, gives an high net worth clients or people who are offset mortgages can
overview of offset mortgages. disciplined with their money and have a good be a good option when
month to month surplus which continues to
build up could certainly find this a suitable mortgage rates are higher
solution.
and mean your money is
It is worth noting that your savings in the working harder to reduce
offset facility will accrue no interest but are
essentially tax free which is an added bonus. In the level of interest
the current climate, offset mortgages can be a accrued against these
good option when mortgage rates are higher
and mean your money is working harder to increased rates.
reduce the level of interest accrued against
these increased rates.

here are many different mortgage For instance, if your mortgage is £100,000 and
products to choose from, and one you have £50,000 of savings then you will only be
Tof the most powerful ones to save charged interest on the £50,000 surplus balance
money is an offset mortgage as it means of your mortgage. However, if you continue to
your money will be working harder for you. make the required payments based on the full
£100,000 balance then your mortgage will be
repaid even quicker. In essence these will be
How does it work? treated as overpayments, and the interest payable ESPC Mortgages can help with all aspects of understanding your budget, applying for a mortgage and dealing
Your outstanding mortgage balance is offset will be considerably less during the mortgage with the relevant insurance requirements. You can contact the ESPC Mortgages team on 0131 253 2920.
by your savings balance which is required to term. You will also still have the option to pay in
be with your mortgage provider in a separate lump sums to the mortgage balance if you prefer,
account arranged by your lender, and you however the offset savings account is doing the The information contained in this article is provided in good faith. Whilst The initial consultation with an ESPC Mortgages adviser is free and
only pay interest on the surplus balance of same thing, as the total balance is aggregated every care has been taken in the preparation of the information, no without obligation. Thereafter, ESPC Mortgages’ charges for mortgage
responsibility is accepted for any errors which, despite our precautions,
advice are usually £395 (£345 for first-time buyers). YOUR HOME MAY
the mortgage instead of the full amount. against the mortgage debt. it may contain. BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A
MORTGAGE OR OTHER LOANS SECURED AGAINST IT.
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