1 Year Offset Mortgages

If you have money in a savings account or have a current account that is in credit the majority of the time, you may find that your money could work much harder for you by offsetting it against your mortgage.


There are a number of different lenders who could offer you deals on 1 year offset mortgages. The following mortgage comparison tables may be able to help you find a mortgage deal that is suitable for you.


For many people, a 1 year offset mortgage could be beneficial for the following reasons:

 

  • As your monthly payments would be based on your whole mortgage loan, you could end up paying off your mortgage early as you are effectively overpaying each month
  • Your savings would not be subject to income tax, as they would be used to reduce your mortgage; this could be particularly attractive to higher-rate taxpayers.


You could have a number of quotes for great value mortgage deals in a few minutes by using the product comparison tables below.

Offset Mortgage Deals
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Representative Example:


A repayment mortgage of £120,000 payable over 28 years and 1 month initially on a fixed rate for 2 years at 1.99% and then on the lender current variable rate of 3.69% (variable) for the remaining 26 years and 1 month would require 24 monthly payments of £465.20 and 312 monthly payments of £565.39 and one final payment of £565.19.


The total amount payable would be £189,357.67 made up of the loan amount plus interest (£68,161.67), booking fee (£999), completion fee (£30) and valuation fee (£197).


In this example the overall cost for comparison is 3.7% APRC representative.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

An offset mortgage would normally work in the following way:

 

  • Your savings account, and sometimes your current account, would be linked to your mortgage
  • Rather than earning interest on your savings, the amount of interest owed on your loan would be reduced
  • For example, if you had a mortgage loan of £100,000 and savings of £5,000, you would only pay interest on £95,000
  • You could have the option to make overpayments, underpayments or take payment holidays; you may also be able to draw money out of your mortgage


1 year offset mortgages could come with different types of interest rates, such as:


Fixed rate
This would guarantee that your interest rate would stay at a fixed amount for a predetermined period.


Tracker
Tracker mortgages are linked to the Bank of England base interest rate, and could rise or fall accordingly.


Standard Variable Rate (SVR)
The SVR is the lender’s basic interest rate without any type of discount; it is not fixed, so could move up or down.


There are many providers competing for your custom with regards to offset mortgage deals, so make sure that you get a few offers before committing yourself to such a serious financial commitment.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

The above mortgage products highlighted on this website are available directly through lenders who will be able to provide further information about the product you are interested in. If you are unsure about what mortgage product is suitable for you, we suggest you speak to an independent mortgage broker