offset mortgage

[pargansingh]

what are the pros and cons of an offset mortgage

[Gnu]

The cons are that the interest rate is often higher for an offset mortgage than for the best discount/tracker product.  As a guide, you would need about 10% of the mortgage amount in the current account to overcome this higher interest rate.

The pros are that any money in the current account effectively comes off your mortgage.  If you got a bonus, for example, it reduces the mortgage without tying up the money until the end of the mortgage.

[Harley]

I have an offset mortgage with First Direct and the interest rate is 5.9% for comparison.I also pay no tax on my savings and that is worth a lot to a higher rate taxpayer.

[Oneeyedvic]

And if you are very clever - you can get a 0% interest credit card advance from certain lenders (try www.moneyfacts.co.uk) and put these cheques in to your current account to offset. If you have a decent credit rating, a couple of cards with 6 months interest fee  @ �5000 each is very appealing.