Working Hours: Mon - Fri: 9:00AM - 6:00PM

Call Us: 0330 304 3040

Home Mortgage Calculators About Blog

Back | How it Works

Securing an excellent mortgage offer with Revolution Finance Brokers couldn't be easier

1Get in Touch

Complete a quick form to give us an overview of your mortgage or financing requirements, and we'll provide recommendations about the best opportunities for you.

2Submit Your Application

Once you've chosen your preferred mortgage deal, we'll steer you through the paperwork with comprehensive application management from start to finish.

3Mortgage Completion

Revolution Finance Brokers will finalise the details and enable you to move forward without delay!

Get Started

Back | About

About

Back | Insurance

Insurance

Business Protection Insurance

Life Insurance

Building Insurance

Home Insurance

Mortgage Repayment Protection

Family Income Benefit

Critical Illness Cover

Income Protection

Life Assurance

Back | Calculators

Calculators

Stamp Duty

Commercial Stamp Duty

How Much Can I Borrow?

Buy To Let

Bridging Loan

Residential & Commercial Bridging

Mortgage Repayment

Development Finance

Commercial Mortgage

Back | Choose your mortgage type

Choose your mortgage type

Offset Mortgages Rated - Pros and Cons

The complete list of offset mortgage pros and cons ensures you apply for the right mortgage product with an understanding of all the advantages and pitfalls that should impact your decision-making processes.

Get Started

What Are Offset Mortgages?

While offset mortgages are an attractive proposition, there are always pros and cons to every mortgage type that you need to consider before applying.

For independent advice from professional mortgage consultants about the best mortgage product for your needs, give us a call on 0330 304 3040, or email the team at [email protected].

Benefits of an Offset Mortgage

People with large savings values typically use offset mortgages, given that the interest rates are higher, and a decent savings value is essential to make this a cost-effective option.

The benefits include:

Reducing your interest costs.
Repaying your mortgage faster.
Retaining access to savings.
Offsetting multiple types of accounts and savings.
Reducing your tax liability on savings interest income

Explore Your Mortgage Options

About Your Mortgage

Single or joint mortgage?

Single

Joint

What’s your yearly income?

Error: Yearly income income must be between £1 and £10,000,000.

Do you receive a regular bonus?

Error: Regular bonus must be between £1 and £10,000,000.

Based On Your Yearly Income, You May Be Able To Borrow

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

Get A Quote

£0

Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

£0

Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

£0

Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

Drawbacks of Offset Mortgages

Conversely, offset mortgages might not be the ideal solution - in some cases, it might be advisable to use your savings as a deposit, rather than keeping them to leverage against your mortgage interest charges.

Potential disadvantages include:

Needing a high deposit usually of at least 25% in addition to the offset savings.
Higher interest rates than on a standard mortgage.
Limited choice of lenders.
Potentially cheaper to use your savings to reduce your mortgage value.
Repayments will increase if you need to access your savings.
Linked accounts must be with the same lender, and therefore may need to be switched.

Which is Better - an Offset Mortgage or a Repayment Mortgage?

There isn't a right answer, since for some applicants an offset mortgage will be ideal, whereas for others a standard repayment mortgage makes a lot more sense.

The pitfall with an offset mortgage is that you sacrifice the interest you would have earned on your savings, by using them to offset your mortgage. However, if the interest on the mortgage would have been higher than the interest earned on your savings, it can be a desirable option.

If you're unsure which option is best for you, give us a call, and we'll run through the scenarios to help you choose the most affordable product.

Remember that if you have a considerable value of savings, an offset mortgage is just one of the multiple options - you might consider other investment opportunities, for example.

How Do Offset Mortgage Overpayments Work?

Offset mortgages include a monthly repayment, usually of a fixed value - even if that consists of a reducing amount of interest as your savings offset is applied.

Therefore, if you leave your savings in your account, or save more, you are overpaying each month and paying back the mortgage faster.

However, it's worth noting that lenders use different calculation bases for the interest charges, so it is essential to have an independent broker recommend the best products from the customer's perspective.

What is a Fixed Rate Offset Mortgage?

Another important consideration is the interest basis - because an offset mortgage can be either fixed-rate or on a standard variable rate.

In most cases - but not all - a fixed rate is advantageous, although the selected rate's length should be negotiated with the benefit of independent advice to make sure you don't end up paying over the odds.

Which Other Factors Impact Whether an Offset Mortgage is Right for Me?

Like any mortgage, a lender will assess several factors before deciding if they can offer to lend. Criteria include:

How much you earn.
Your credit history.
The property.

Choosing a mortgage can be complicated, with thousands of options, so contact Revolution Brokers for an unbiased recommendation based on your borrowing requirements.

Independent Advice on Offset Mortgages

Mortgage advisors works with thousands of clients, advising on the best-offset mortgage deals, and alternative borrowing products where we think they are a better option.

Give us a call on 0330 304 3040, or email the team at [email protected] to schedule a good time to talk.

Explore Our Presence

Securing an excellent mortgage offer with Revolution Finance
Brokers couldn't be easier:

PROCESS

Revolution Mortgage Brokers:
100% Independent & Whole-of-Market

As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.

REFERRALS

Refer, Relax, and get £50

If you refer a friend for a mortgage or anytype of finance you’ll both receive £25 each when their
new application successfully completes.

Learn More

Ask the Expert

Mortgage Brokers

Revolution Mortgage Brokers understands that mortgages can be complex and confusing! Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.

What can we help you with today?

Do you have a particular timescale in mind?

Which situation from the below list best matches your requirements? *

Could you tell us the market value of the property?*

Please let us know a rough idea of your yearly income (before tax) for all applicants? *

Back

Primary applicant name *

Contact email address *

Best contact number *

Back

Get Started Call 0330 304 3040 Mon - Fri: 9am - 6pm

Find out more about us

Offset Mortgages Rated - Pros and Cons