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How Does an Offset Mortgage Work?

Benefits of a Offset Mortgage

How Can Friends Capital Help?

Offset Mortgage

An offset mortgage lets you link a savings account to your mortgage to reduce the amount of interest you pay on the outstanding  amount. Instead of earning interest on your savings, you offset  interest on the mortgage balance minus the amount of savings you have. 

Offset mortgages offer many challenges for a borrower, and it’s important you seek financial advice from a mortgage advisor before you go ahead. Friends Capital will review your personal circumstances and then search the entire market to ensure you get the best mortgage deal possible. We will then deal with all the paperwork, submit your mortgage application, liaise with your mortgage lender and solicitor, and ensure that your mortgage application is completed as quickly as possible. We can: 

  • Save you money on your mortgage deal 
  • Offer a free consultation 
  • Offer unbiased financial advice 
  • Save you time in your mortgage application 
  • Give you a dedicated account manager who is available to you through the process 

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How Does an Offset Mortgage Work?

Offset mortgages work by keeping your savings and your home loan in the same place. An offset mortgage is a mortgage that is linked to your savings account. Your savings balance can ‘reduce’ the mortgage amount, meaning you are charged interest on a smaller sum. The interest on your savings reduces the interest you pay on the loan, which means you can pay off your mortgage sooner. 

Your savings are not used to pay off your mortgage. Instead, they sit in a separate savings account that pays no interest. But, the balance of your savings account is effectively added to your offset mortgage account. Lenders deduct this amount from your mortgage balance and only charge you interest on the remaining amount.

Benefits of an Offset Mortgage

  • Potentially lower Monthly Payments – As the interest on your savings pays the interest on your mortgage, you are only paying back your mortgage amount on a monthly basis. Minus the interest. 
  • Pay Off Your Mortgage Quicker – As you have lower monthly payments, you are able to make higher monthly payments on your mortgage.
  • No tax on Money You Save

How Can Friends Capital Help?

Friends Capital have relationships with lenders that specialise in offset mortgages. We can search the entire market and get access to the best and most exclusive deals available. Then we will choose the deal that are most appropriate to your personal circumstance. We can: 

  • Find you a lender that offers offset mortgages
  • Find you a deal appropriate to your personal circumstance
  • Offer unbiased financial advice
  • Give advice on what mortgage lenders will require, including giving you advice on an exit strategy for the mortgage end
  • Give you a no obligation mortgage quote
  • Deal with all the paper work, liaise with the lenders and solicitors. We will also make sure the application goes through as quickly as possible

Two Steps to Contacting Friends Capital 

Step 1 

Either call us, email us , book an appointment online or request a call back below.

Step 2 

One of our friendly advisors will either call you back within 24 hours (usually the same working day), or will take details from you in order to best deal with your situation. 

When you speak with us, we will take a ‘fact find’. At this stage we take basic details about your situation. We will then search the whole of the market and find you the best deal available. 

If you are happy with the deal that we offer, we will then contact the lender for you and get you what is called a ‘decision in principal’. 

If you’re happy with the decision in principal then we will secure this deal for you and deal with the application for you on your behalf. 

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