Offset mortgages are becoming more popular, now making up 10 percent of new mortgages. This growing trend is due to their flexible repayment terms and convenience. Basically, with an offset mortgage, the interest you pay is calculated on the net loan amount after taking into account any savings you have in your account.
These mortgages are especially useful for people who have saved at least 8 percent of the total mortgage amount. A big advantage is the lower interest rate, as you can link your savings or current account to your mortgage. This flexibility allows for overpayments when you have extra money and underpayments during tighter months, although you need to have overpaid before you can underpay.
In today’s credit crunch, getting future loans may be tough, but offset mortgages let you borrow the same mortgage amount again if needed. Mortgage providers can explain all the options available with this type of mortgage. Some offer a low Annual Percentage Rate (APR) but include Early Redemption Charges (ERC).
You can tailor offset mortgages to fit your needs, regardless of whether you’re buying a house or a flat. They can be adjusted based on your financial situation, allowing you to link your account to your mortgage temporarily or for the long term. With a variety of options, offset mortgages are a great deal and make managing mortgage repayments easier. Therefore, choosing a reliable Offset Mortgage Provider is highly recommended.