Offset Mortgage Explained
An offset mortgage is a particular type of mortgage product like a variable, fixed or tracker mortgage are also types of mortgage.
With this product, it can be a little more complicated to understand, but the core idea is simple: that you OFFSET the interest on your mortgage through your other accounts that you have with the financial institution that provides the mortgage (moneys you may have elsewhere won't count!)
For instance, if you have £5,000 of savings you could offset them against the interest on the mortgage and therefore you could reduce the total amount of interest that you have to pay on the mortgage.
The flip side is that you don't earn interest on those savings, but then at the time of writing you will be getting very little interest on those most likely!
For those with a decent credit balance there is the potential with the right offset product to save a significant amount of money off the total amount you will need to repay on the mortgage compared with another product.
Property Articles
We hope you find this mortgage glossary / explanation of mortgage terms useful. You might also be interested in our articles on a range of property related issues, a selection of which are listed below:- Mortgage FAQ
- The Auctioneer
- Mortgage Fees
- Additional Borrowing on a Mortgage
- Property Gazuming Explained
- Holiday Home Mortgages
- Buy To Let
- Relocation Agents
- What to do at auction
- Finding Commercial Property
- Buying a house with friends
- First Time Buyers
- Buying Thatched Houses
- Renting Commercial Property
- Home Buying Milestones
