Off Set Remortgages

What is an Offset Remortgage

An Offset remortgage is a remortgage that enables the borrower to keep balances (such as mortgage debt, current account and savings account ) in separate accounts, but interlinks the balances to calculate the real value of interest.

Money in savings or current accounts is set against the mortgage balance and interest is only charged on the outstanding amount, meaning interest payments are reduced. Every Remortgage lender will have slightly different rules.

Advantages of an Off-Set Remortgage

  • Offset remortgages can be settled earlier than most other remortgage options
  • Since the interest is charged on the difference between the total borrowed and a secondary account amount, the offset remortgage typically offers reduced interest rates
  • With the reduced interest rate applicants can save thousands in repayments
  • You can make irregular and varying payments towards the mortgage debt

Disadvantages of an Off Set Remortgage

  • With a huge selection of offset remortgage deals on the remortgage market it can be a very difficult task locating the best off set remortgage deal
  • If you fail to clear the mortgage debt when the agreement matures (ends) you will loose your home.
  • People can fall into an uncomfortable position by ignoring the remortgage debt

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