Mortgages Uncovered

Offsetting as it is known in the banking world is popular in countries such as Australia where you combine your mortgage, current account and savings into the same package has never taken off in a big way in the UK.

Offsetting accounts is not suitable for all customers, but the recent tougher financial and economic climate makes it a more attractive proposition for an increasing volume of customers. If you have a good amount of savings that you require easy access to putting them into an offset account may help you to pay your mortgage much faster giving you flexibility you may need from your cash.

“In any housing market downturn, it is important to reduce your mortgage if you possibly can, if property prices fall, the threat of negative equity – where your mortgage is greater than the value of your home – grows. By reducing your mortgage, you reduce this risk.”

Says independent mortgage broker Melanie Bien at Savills Private Finance.

At a time when energy and food prices are increasing, an offset account may also help you to reduce monthly mortgage payments.