Offset Mortgage Calculator

If you have substantial savings in addition to your mortgage, you could save on your monthly mortgage payments by considering an offset mortgage. To compare a wide selection of offset mortgage options, use our mortgage calculator above to find the best offset deals.

How does an offset mortgage work?

This type of mortgage works by offsetting your savings against what you owe on your mortgage, therefore reducing the overall amount of interest that you have to pay on the mortgage. So, for example, you might have a mortgage of £150,000 on which you are paying interest. However, if you offset the mortgage against £30,000 in savings, you will only be paying interest on the difference – in this case, £120,000. Over the life of the mortgage, this can save you a considerable sum in interest payments.

What are the benefits of an offset mortgage?

• The opportunity to beat low savings rates - the interest you are likely to be charged on your mortgage will usually be far more than you can earn on your savings in an equivalent easy-access account which will also usually be taxed. But, if you use savings to offset your mortgage, you will have no tax to pay on these savings. This could be especially important to those mortgage borrowers who are also higher rate taxpayers.

• Access your savings when you need to - you don’t have to lock up your savings for the duration of the mortgage.

• Pay off your mortgage faster – because you are paying interest on a lower amount on an offset mortgage you may be able to pay off the mortgage more quickly than an equivalent repayment mortgage.

What are the potential drawbacks of offset mortgages?

• Potential for higher rate changes - the rates charged operating on offset mortgages may often be higher than those on standard mortgages.

• Savings requirement – many people don’t have a large enough savings pot to benefit from an offset mortgage, which means that they are not suitable for everyone.

To compare top mortgage interest rates and find the best mortgage deals for you, use the mortgage calculator to search over 5,000 mortgage deals based on your personal circumstances.