Hot Tips On Getting The Most From An Offset Mortgage Account

Maximise the account

Make sure you pay in as much as you can. If necessary, change your personal details so as your wages are paid into your offset mortgage account - and remember, any other family members' wages can be redirected into the account. Also, if you have money elsewhere, or extra income every month, make sure that's going in as well. The more money being paid into the offset mortgage account, the cheaper your interest rate will be.

Use your savings

If you have several bank accounts or savings accounts, it would be wise to get them all together in your offset mortgage account. Savings will especially pay off - they have been rarely touched so will put a huge dent in the balance of the account. This means you can feel better about spending other money. It's just a case of offsetting as much as you can against your mortgage - the more you can gather, the more you will save.

Move your money carefully

Remember, the more money leaving the offset mortgage account, the more you will pay in interest. If possible, take out as little as possible each month, maybe by using auxiliary bank accounts. Every withdrawal or movement may be detrimental to your mortgage interest rates.

Also, any interest made by the money in the offset mortgage account cannot be taxed. So keeping money in the account will mean more interest for you at the end of the month, free from the taxman's clutches.

This means with all these savings you will have more money in your offset mortgage account every month to pay that little bit extra off on your mortgage. An offset mortgage account can be the perfect way to pay off your mortgage quicker, because remember - a cheaper mortgage is great, but no mortgage at all is even better.

Be prudent

Once you sign up to an offset mortgage account, you are signing up to become more prudent. Extra spending will not help the mortgage, and many lenders even set limits on how low your offset mortgage account can be. If you know that you may have to spend big in the future, reconsider an offset mortgage. If you are a saver, or want to become a saver, then the offset mortgage account may be for you. An offset deal pays those who are sensible so don't slip up and at the end of each month. But if you are responsible with your money you will be able to revel in the lower interest rates and tax-free savings an offset mortgage account can offer.

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© 2007 and 2008 Offset Mortgage Centre | Terms and Conditions | Privacy Statement | We don't charge a fee for admistration of an offset mortgage. The Offset Mortgage Centre is the trading name of The Mortgage Broker Ltd, (a whole of market mortgage broker), which is an appointed representative of Home of Choice Limited, which is authorised and regulated by the Financial Services Authority | Your home may be repossessed if you do not keep up repayments on your mortgage. *Source - Mortgage Strategy April 2007: One of the first on the market was Yorkshire Bank along with Woolwich and Virgin One. **Source Barclays Bank: Calculation based on an offset tracker product; repayment mortgage of £100,000 over a 25-year term that has been offset with £20,000 savings, resulting in a reduction in mortgage term of 8 years and 8 months or a saving of £44,867 in overall interest. Calculation assumes balance remains constant throughout the life of the mortgage and that the mortgage loan and savings balance will vary. Outcomes will be either a reduction in payments or a reduction in mortgage term. No interest is paid on balances offset against the mortgage.