Page 35 - May 2023

INTERIORS INSIDER EXPERT ADVICE

How do offset mortgages work?
Aye aye captain! David Lauder, Independent Mortgage Adviser at ESPC Mortgages,

gives an overview of offset mortgages.

here are many different mortgage
products to choose from and one of the still have the option to pay in lump sums if you
prefer to the mortgage balance, however, the
Tmost powerful options to save money is offset savings account is doing the same thing,
offset mortgages as it means your money will as the total balance is aggregated against the
be working harder for you. mortgage debt.
Reminiscent of still ocean waters, this warm shade has a
casual charm. A versatile, mid-toned blue that’s ideal in How does it work? Who can set up an offset
sociable areas of the home. Your outstanding mortgage mortgage?
balance is offset by your You may need to be at
savings balance which is a certain stage of your
required to be with your financial life to be suitable
mortgage provider in a but professionals, high net
separate account arranged worth clients or people who
by your lender, and you only are disciplined with their
pay interest on the surplus money and have a good
balance of the mortgage month to month surplus
instead of the full amount. which continues to build up
could certainly find this a
For instance, if your mortgage suitable solution.
is £100,000 and you have
£50,000 of savings then you It is worth noting that your
will only be charged interest savings in the offset facility
on the £50,000 surplus will accrue no interest
balance of your mortgage. but are, in essence, tax free
However, if you continue to which is an added bonus. In
make the required payments the current climate, an offset
based on the full £100,000 mortgage can be a good
balance then your mortgage option when mortgage rates
will be repaid even quicker. In are higher and means your
essence these will be treated as overpayments, money is working harder to reduce the level
and the interest payable will be considerably of interest accrued against these increased
less during the mortgage term. You will also rates.

ESPC Mortgages offer expert mortgage advice in Edinburgh. consultation with an adviser is free and without obligation.
If you are looking for mortgage advice, get in touch with the Thereafter, ESPC Mortgages’ charges for mortgage advice are
team on 0131 253 2920 or fsenquiries@espc.com usually £350 (£295 for first time buyers).
The information contained in this article is provided in good YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP
faith. Whilst every care has been taken in the preparation of UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS
Skipper 2.5L Claypaint, £54, Earthborn,
the information, no responsibility is accepted for any errors SECURED AGAINST IT.
earthbornpaints.co.uk which, despite our precautions, it may contain. The initial
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