Offset Remortgages

The competition in the mortgage market has prompted lenders to think up new loan options. There are so many types of re-mortgage options that most people are hard-pressed to find the ones that offer the better deals. If you are one of those people who are trying to get a better deal for your mortgage and want to pay off your remortgage debt a bit faster, then you could opt for the an offset remortgage deal.

An offset remortgage lets you offset your current account as well as your savings against your existing mortgage. This typically translates to you paying less interest.

Offset remortgage tie your savings, current account and mortgage for the interest rate calculation, the savings that will come out will be offset against the sum of your remortgage debt. An example of this is that if you borrow £100,000 but have £15,000 pounds in savings, interest will only be charged on £85,000. The £85,000 is the sum that results after your savings have been used to offset the borrowed amount.

Now, you might ask if an offset remortgage is suitable for you and your needs as a borrower. Offset remortgages could fit the needs of quite a wide range of borrowers but it is not right for everyone. So, before you decide to settle on an offset remortgage, there are some advantages and disadvantages to that you must consider first.

You have to consider that if you tie your savings and current account to that of your mortgage, as is the case in an offset remortgage, then any money that is in your accounts will not typically get any kind of interest.

If you get your income through a bonus scheme or if you are a contractor or self-employed, then getting an offset remortgage could be a suitable solution. But we would urge you and all other information seekers to consult a financial specialist.

Back to Offset Remortgage

Skip To Content