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Offset Mortgages

Combine a mortgage and bank account to potentially reduce interest payments
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Why offset savings against the mortgage balance?

An offset mortgage is a unique financial product that combines a mortgage with a savings or current account. This type of mortgage allows borrowers to offset the balance in these accounts against their outstanding mortgage debt. The key feature is that the amount saved in these accounts is subtracted from the total mortgage amount when calculating interest, potentially reducing the interest paid over the life of the loan.

What are the benefits of an offset mortgage?

Interest Savings

By offsetting savings against the mortgage balance, borrowers effectively pay interest only on the net balance, which can result in substantial savings.

Tax Efficiency

Since the savings are offset against the mortgage balance and not considered as income, there may be tax advantages. This can be particularly beneficial for higher-income individuals who may be subject to higher tax rates on savings interest.

Access to Savings

Despite offsetting their savings, borrowers retain full access to their funds in their linked accounts. This means they can use their savings for emergencies or investment opportunities without the need for a separate loan or withdrawal process.

Auction Properties

Borrowers can use an offset mortgage to have funds instantly available for the purchase of an auction property and benefit from not paying interest on it.
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Who should offset their savings against their mortgage balance?

You may consider an offset mortgage if you value the following financial benefits and priorities:

Savvy Savers

Offset mortgages are ideal for individuals or families with substantial savings. By offsetting these savings against their mortgage, borrowers can reduce their interest payments while retaining easy access to their funds.

Tax-Efficient Borrowers

Some borrowers find offset mortgages tax-efficient. Instead of earning interest on their savings (which may be taxable), they can save on mortgage interest, which can be more advantageous from a tax perspective.

Flexible Repayment Strategies

Offset mortgages allow for flexibility in repayments. Borrowers can make overpayments to reduce their mortgage balance faster or underpayments during challenging times without penalties.

Long-Term Investors

Individuals who aim to maximise the returns on their savings while gradually paying down their mortgage debt often find offset mortgages appealing.

Interest-Conscious Borrowers

Borrowers interested in paying less interest over the life of their mortgage can benefit from an offset mortgage's potential to reduce the overall cost of borrowing.
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Making offset mortgages easy for you

Windsor Hill works closely with individuals considering an offset mortgage to assess their specific financial situation and determine if this specialised mortgage product aligns with their wealth management goals and real estate investment plans.

Speak to one of our expert team members today to help you with your offset mortgage requirements at 01225 962 456 or email info@windsorhillmortgages.co.uk

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