Why The Best Offset Mortgage Rate Beats Any Savings Rates Right Now

There is no doubt about it, the best offset mortgage rate on the market right now will beat any savings rate you can find. Why is that? Well, simply, mortgages improve when the Bank of England reduces the Bank Base Rate but savings rates often become worse as they will decrease in line with a rate cut. So the best savings rate at 0.5% base rate is not going to be as good as the best offset mortgage rate. Also, on top of the better rate, offset deals have a raft of other extras that make them a far superior choice to any regular savings account. But what else do they offer? And how can you move your nest egg into a special, tailor made mortgage?

When a lender borrows money, it's related to the Bank of England's base rate and LIBOR rate - so right now the lenders are paying a minimum of only 0.5%. Mortgages can be sold more cheaply as a result, because the lenders can find the funds for them more cheaply. So there are plenty of deals out there that are the best offset mortgage rate deals seen for a long time. But in contrast, of course, the same institutions try and make money from their savings - the rates they offer must still allow them to make money. But the banks and building societies are only making 0.5% on any savings that are invested in them, so what they pay out, i.e. the savings rate, has to be even lower. So in a very low interest rate world, the best offset mortgage rate beats the best savings rate.

If you choose one the best offset mortgage rate deals on the market, you will only have to pay out a small amount for your mortgage at the end of the month. Then of course, if you save money alongside that offset mortgage, that end rate will be reduced even further the next month. This means you can not only save more money with an offset, but you can also reduce your outgoings every single month - something which is critical during a downturn.

And an offset mortgage doesn't just allow you to save - you can spend as well. The best offset mortgage rate might be diminished somewhat if you do begin to take money out of your offset account, but at least you have the option, like you would with a regular easy access savings account. It's all about flexibility, and right now there isn't much flexibility in a savings vehicle, but there is in a offset mortgage. It gives you the ability to save, to spend, to pay less and to pay more - it's all down to you. Just know that the more you save, the better chance you have of accessing the best offset mortgage rate.

So if you are sick of earning peanuts with your savings account, talk to a mortgage adviser about taking out a mortgage with the best offset mortgage rate. With the right adviser, the process of taking out a new mortgage with the best offset mortgage rate shouldn't be too long or too expensive. As soon as you invest your savings into the mortgage the rate will drop - instant savings, a phenomenon you will not find with any other financial product in the UK right now.

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