offset mortgages

[rinsy]

Hello,

I am just wondering if anyone has an offset mortgage and if it has been as beneficial as they appear to be. Its just something I'm considering for the future...

Thanks

[nicolab6]

I have one and it has been very beneficial - however it is only really advisable if you have sufficient levels of savings. The interest rates tend to be slightly higher, so if you do not have enough savings to offset, you would be better off with a standard mortgage.

As a rough guide, I would say that you should look to have at least 15-20% of your mortgage amount in savings. You retain the flexibility to use this money as you wish (you might dip into it some months and top it up other months), so if, like me, you want to retain some control over your savings but make them work for you, then the offset is good.

Finally, if you are a 40% tax payer, the benefits are even greater as you do not earn interest, you do not have to pay the tax on it - more money to save against the mortgage and less for the tax man - and it is all perfectly legal!

[bednobs]

i have an offset mortgage with considerabley less savinggs than the previous poster recommended (actually only about 5 % of the mortgage total) but it certainly makes me feel much richer. The interest rate is a baseline tracker + 1 i think, but it an abbey flexible mortgage, which also has other benefits for which i am happy to pay a slightly higher rate