How it works
Your savings are linked to your mortgage with the same provider. You don’t earn interest on those savings; instead, they’re “offset” against your mortgage balance, reducing the amount of interest you’re charged.
Example
On a £200,000 mortgage with £20,000 in linked savings, you pay interest on £180,000.
Why it can help
Mortgage rates tend to be higher than savings rates, so offsetting can be financially beneficial.
Two ways to benefit
Shorten the term
Keep repayments based on the full mortgage (e.g., £200,000). You pay more than the interest due each month, clearing the debt faster.
Lower monthly payments
Base repayments on the offset balance (e.g., £180,000) to reduce monthly costs; the term stays the same.
Tax position
Because your savings don’t earn interest, there may be less savings interest subject to income tax.
Eligible accounts
Some lenders allow you to offset current accounts and cash ISAs in addition to savings. Withdrawals reduce the offset and can increase the interest charged.
Rates and products
Offset mortgages are available with fixed or variable rates. Some lenders may charge a higher rate than for comparable non-offset products.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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Where we are
HCF Partnership
Ground Floor, 8 Beaumont Gate,
Shenley Hill, Radlett,
Hertfordshire, WD7 7AR
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