Mortgages Uncovered

Who would benefit most from an offsetting Account?

If you have savings to at least 5 or 10% of your outstanding mortgage it is worth considering an offset mortgage or if you want to start making decent-sized monthly payments into your account this will also be a good consideration.

“If you earn a large chunk of your annual income through bonuses an offset account is also a viable option.”

Are offsets really good value?

Typically, the higher your interest rate, the more by way of value you will get from your savings.

Offset rates tend to be a little higher than the keen-priced mortgage products but the rates are currently much more competitive than they were previously. As an example, First Direct’s 5.99% 2-yr fixed rate offset account, recently launched, is as cost effective as any standard 2-year fixed rate on offer but comes with a fee of £1,498.

For a high rate taxpayer, earnings will need to reach 9.98% to get similar benefits from your savings. If you have a large enough mortgage to justify the fee and a large amount of cash savings First Direct’s offset product will offer you excellent value for money.

More mortgage information:
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