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The best way to get through Christmas is to save all year round – with an offset mortgage you can’t help but save, so by Christmas you should have plenty of hard-earned savings to spend.

New figures from Abbey has found that Brits will use £3.45bn of their savings this year to help cover their Christmas spending.

It found that a third of us plan to use 9% of this year’s savings – an average of £221 each. But it’s no surprise however that the majority of people are planning to cut back this Christmas, with gifts for family and friends first on the list of cut backs, as 42% of Brits say that they will reduce spending on these.

As many of us plan to reduce spending on Christmas drinks, parties and meals. Shockingly, almost one million Brits are already saying they will return the gifts they receive this year in exchange for cash, in order to reduce the financial burden of the festive season.

Those with an offset mortgage do not have to worry about cutting down – in this low rate year, offset mortgage holders have had to spend out less on their mortgage each month, giving them more room to save.

Most concerning however is 39% of us are currently saving nothing and one fifth of people claim to have no savings whatsoever to fall back on this Christmas.

Reza Attar-Zadeh, director of savings and investments says: “It’s clear that many people are planning ahead and scaling back this Christmas in an effort to reduce their spending, which seems a sensible move. We know that people still rely on their savings to cover many of their Christmas outgoings but savings shouldn’t just be for Christmas, and we encourage people to keep a healthy balance, so that they’re starting the New Year from a good base.

“Whether savers decide to put their money aside for the long term, for a specific purpose such as a Christmas or a holiday, or for emergencies, the most important thing is to work out a plan of action that works for them – then choose the right products to suit their needs”

For some, that right product is an offset mortgage. If you want to know if offset will be your best choice, talk to a financial adviser about getting hold of a mortgage that helps you save throughout the year.

SOURCE: Abbey, 30/11/09

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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It seems that parents are finding it harder to save than ever – research from Abbey has found that over one in four British parents with young children have no savings or investments – so more parents should be considering offset loans.

The bank’s research has found that 20% of these parents have less than £1000 to fall back on. This is a growing concern for families, especially for those parents who are contending with the higher costs of raising a child. In fact, this has resulted in a quarter of parents reducing the amount that they are saving by as much as £3,300 a year. 

With an offset mortgage, this wouldn’t be such a problem. As well as keeping a roof over their family’s head, parents can reduce their monthly mortgage bill by saving – the more they save, the more they reduce and in turn, save. This can help build a nest egg, which is vital for any growing family.

Reza Attar-Zadeh, director of savings and investments at Abbey says: “It’s vital for everyone to have a rainy day fund even more so for parents, who must juggle the need to build up a nest egg for their children’s future with the need to provide for the here and now. So It is concerning that many families are saving less, as this could leave them facing financial difficulty in the future. It’s encouraging to see that some families are looking ahead and planning to save more – we hope this trend will continue”.

Andrew Hagger of Moneynet.co.uk says: “With interest rates at a much lower level than 12 months ago, it’s no surprise that parents are saving less. However, putting a little cash aside each month, rather than continually reaching for the plastic is a habit that UK households need to rediscover.

“Unless you make a determined effort to start saving, it’s one of those things that’s easy to put off and never get round to doing anything about.”

So make a determined effort and talk to a mortgage adviser about a loan that encourages you to save. Offset gives you and your family a break every single month, if used to its potential – and the more breaks a family can get right now, the better chance they have of a better financial future.

SOURCE: Abbey, Moneyfacts, 10/11/09

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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Do you know if you could be making even more of your offset loan? You might think that you are making the most of your money by simply having an offset mortgage, but you could be doing EVEN more.

One of the great things about offset is that you can take money out of the mortgage as easily as you can invest money in. Depending on your equity and the size of your lump sum you can take money out and reinvest it back into your property to increase its value and make even more of your savings.

By doing a bit of homework by talking to estate agents and surveyors you could find out what you could do to your home to make it worth it even more. It might be a loft conversion, a new garage, a bigger garden or a new kitchen. Whatever they think will be a wise invest can be funded with an offset loan.

Of course you can use your offset to make your home better for you, but for many this is a financial decision – it’s about making a choice that will give you more equity in the future, which could allow you to get a better offset loan in the future and will make your offset lump sums give you even more savings.

So once you decide if home improvements are the right decision, talk to a mortgage adviser about how much you can take from your loan. It’s about the long-term, so they will help outline what your rate of interest will be, how much you could make if your home does increase in value and how long you should wait before remortgaging or moving.

This is not to say that home improvements are the right choice for everyone right now, but for offset mortgage holders the option is always there. So do your homework, listen to advice and be aware of the potential that your offset mortgage offers you.

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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Annual house prices have reached positive figures for the first time in nearly two years as Brits finally see their homes increase in value over the longer term.

According to Nationwide, UK house prices in October were higher than those in October 2008 – the first annual rise for 19 months. Overall, property prices were 2% higher in October than in the same month last year, with the average home now costing £162,038.

So equity is rising, slowly. Over the last two years people have seen their house prices plummet, and those with offset mortgages have seen their offset lump sums become less influential – a larger proportional mortgage means your rate increases if your lump sum does not.

But now the tide is turning. Those who have struggled with their offset mortgage are now seeing their lump sum slowly come into the fore – their mortgage is shrinking, but their lump sum isn’t and as a result rates are getting smaller.

So if you have an offset, talk to a mortgage adviser about your options now. You may benefit from a remortgage, you may benefit  from using some more of your savings to increase your lump sum. A mortgage adviser can take you through all the different potential mortgage scenarios with you and help you come to a decision that will save you money.

Alternatively, if you have some savings and want them to make a difference, it might be worth looking at an offset loan while prices are depressed. It might be time for you to also talk to a mortgage adviser and see whether an offset loan could benefit you. If you get the right deal, and use your money as you should, you could see your offset cash do wonders over the next year as house prices hopefully carry on increasing.

SOURCE: Nationwide, 30/10/09

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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All advisers are telling people these days to ‘overpay, overpay, overpay’ – in this low rate environment many Brits have seen their mortgage rate fall dramatically and many have the capability to overpay on their loan. And no loan is better to overpay on than an offset loan – because the more you overpay on a flexible deal, the better rewards you receive:

1. Reduces outgoings
If you stick with your offset repayments, you will reduce the amount you have to pay on your mortgage each month – the more that is offset against your loan, the lower the rate of interest you have to pay. And it’s exponential, so each month of overpaying into your loan means another month of decreased outgoings.

2. Reduces the life of your loan
You can choose to either reduce the rate of your mortgage or you can choose to reduce the term of your loan. Offset mortgages are very flexible and allow you to save alongside or save directly into your loan. This means you can, if you wish, reduce the amount of time your mortgage has to run. We all want to have less debt for less time, and with offset overpayments that’s exactly what you can do.

3. Increases equity
As you reduce the term of your loan, you also increase the amount of your home that you will eventually own. If you save a huge lump sum next to your property, you have more equity to spend when it comes to selling up and moving on. In these days of reduced loan to value ratios, any extra money you have could be vital to moving onwards and upwards.

4. Improves credit score
Lenders always look at your credit history to determine your chances as a borrower, so the better behaved you have been with a debt, the better chance you have of getting a bigger and better debt in the future. Overpaying on a mortgage is about as well behaved as you can get, so the longer you overpay, the better your score and the more attractive you will be to a lender in the future.

5. More chance to clear future debt
Because you are increasing your equity as you pay more, you are increasing your reserves. Those reserves can be used in the future to help pay off a number of debts – cars, holidays, weddings, kids’ university fees – there is always something else to account for, and by overpaying, you give yourself the reserves and the ability to meet any big outgoings head on in the future.

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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Private pensions can be complicated and they are hard to get excited about when it could be maybe forty years before you see the fruits of your investment – so invest your money into an offset mortgage and watch your nest egg make a difference right away.

We are all going to be living longer and we are all going to need to have saved more money to help us through our old age. Public pensions are a start, but it’s clear that we are going to have to work harder at saving more. But private pensions do nothing for us now – when we retire we reap the rewards, but now private pension investment might just feel like another outgoing.

So put your money somewhere where it will be felt, right now – if you save your money against your home loan you could reduce the rate and the term of your mortgage today, not in forty years. Not only does that mean you are saving long-term and helping reduce your debts as you approach old age, but you will also see monthly reductions in how much you have to pay today.

Also, money invested into a pension is locked-up. It’s good to know it’s there, but if you need money fast that good feeling will not pay the bills. Money saved against an offset loan is different – if you need it, it’s there for you. Taking money from your nest egg will affect the rate you pay on the loan, but crucially the lump sum is there if you absolutely need it, because none of us can predict the future.

So if you think your long-term plans could benefit from a mortgage that allows you to save for your old age and also makes things a little easier month by month, talk to a mortgage adviser. They will be able to show you the benefits of this innovative loan and can help you paint a picture of a brighter future.

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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Despite the serious issue of lack of income in the current environment, and widespread belt-tightening, Saga Personal Finance has revealed that most Britons are doing little to make the most of their savings.

It found that almost two thirds of people admit they do to not even knowing the rate of interest on their accounts. The over 50s are savvier at knowing their current rates, with almost half aware of them, in contrast to over two thirds of the younger generation who have no idea what their money is making them.

Worryingly, a quarter of people only check interest rates when opening a savings account, and a further 25% check them once a year or less – at this difficult time you should be doing all you can to make sure your money is working as hard as you are.

But almost two thirds of savers are unhappy with the current rate on their account. The research shows that a massive 89% believe that having a good rate of interest is important, compared to four years ago, when less than three quarters thought so.

In this low rate environment, savings rates are not going to help you make a decent return on your money. But with offset – where a lower rate is reduced with more investment – a low rate environment means you save money every month.

You need to be acutely aware of how much you could be making on your savings right now – so talk to a mortgage adviser about switching to an offset mortgage. They will show you that as each month passes, you will see your rate drop – the best incentive to keep an eye on your money.

SOURCE: Saga, 07/09/09

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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Two recent house price indexes have found the UK property market to be regaining a little momentum with continued price increases – but what does this mean to offset borrowers?

The latest house price index from Nationwide found that house prices increased by 1.6% in August this year, the fourth month in a row that house prices have increased. It also found that year-on-year figures show that house prices are less than 3% down on what they were 12 months ago – meaning prices are likely to be back in the black by the end of 2009.

Also, the Land Registry found that house prices had increased by 1.7% in July, the largest amount its index has jumped in a single month for five years.

So what does this all mean for you? Well simply, it means you have more money to play with – as equity in your home increases, so does your lump sum’s potential. Since the credit crunch began, people who have been investing into their offset have been seeing their saved lump sums mean less as house prices crumble.

But now, as prices begin to slowly rise, they can be safe in the knowledge that their lump sums are doing even more – the bigger percentage of your home you own, the less you owe, which means your offset has a bigger affect on your remaining mortgage.

So while we are not out of the woods yet – the Land Registry, whose data collection differs from Nationwide says year-on-year house prices are still nearly 12% down on prices 12 months ago – house prices are rising. This will hopefully get more offset mortgage holders saving as they begin to see even better returns from their investment.

SOURCE: Nationwide, 26/08/09, Land Registry, 28/08/09

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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The recession is prompting Brits to seriously rethink the state of their finances and their long-term financial futures, according to a report from Friends Provident.

The firm found that there is now a new breed of realistic thinkers are emerging from the downturn, people who have been prompted to get a grip and give serious thought to their savings and long-term financial options. Friends Provident says many people now recognise that their lifestyles cannot be maintained permanently without greater financial security.

It says this has led to one fifth of UK adults feeling a greater need to look ahead and plan for the future as a result of the recession, with a third starting to save more since the beginning of the recession.

This new sentiment may see more people considering savings mortgages – loans that incorporate savings pots to save money and reduce debts. By saving more and handling debt more carefully with a loan that encourages prudent spending, many people will find themselves more ‘recession-proof’ next time round – if another downturn comes along in the future they will have the financial means to deal with it.

Simon Clamp, managing director UK at Friends Provident, says: “Despite the negative impact of the recession experienced by many people across the UK, it is encouraging that a significant number have taken it as an opportunity to become more financially savvy. Increasing financial awareness amongst consumers can only be a good thing and this is demonstrated by the numbers who are reducing their debts and becoming more focused on their futures and saving for the long-term.

“A long-term benefit of the recession may be a generation of younger people who have learnt important financial lessons.”

SOURCE: Friends Provident, 08/08/09

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.

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In the future more and more families are going to have to work together to ensure property investment success according to a new study – meaning family offset mortgages could become a crucial mortgage product for many.

A new report into the financial future of families by National Savings and Investments has found that family members are now waking up to the fact that they must work together if they are going to be able to afford homes, healthcare and children.

This is where a family offset mortgage could fit in – parents or grandparents can invest their savings into a savings account that is offset against their children or grandchildren’s first mortgage. This means their family can get onto the housing ladder and they can make some use of their hard-earned savings. And because the savings are only offset, not invested, they can be reinvested elsewhere at a later date.

The NS&I report suggests the existence of a new institution of British life – the ‘Financial Family’ – a collaborative unit of close friends and family marked by financial interdependence. It does not simply show a steady flow of cash down the generations but also shows flows of money and advice, up and down the generations as well as between siblings.

By families helping each other financially, money can be saved over the years and spent elsewhere on healthcare, further property investment, education, elderly care or even a trust fund for future generations.

The study also found that as this current generation grows up, the Financial Family will become more and more widespread – the future will be one where the whole family shares the burdens of debt to ensure a bright financial life for the family as a whole.

Barry Clark, associate director at the Future Foundation says: “When we look at several demographic trends, like the rise of single-person households, the advance of technology and young people’s involvement in financial matters, we can expect the Financial Family to be a very important feature in the future. The Financial Family is here to stay.”

Tim Mack, savings expert at NS&I, says: “We started from an intuitive feeling that discussing money isn’t taboo any more, but the results far exceeded our expectations. The research shows that the discussion of finances, and our relationship with money, extends beyond the traditional family.”

SOURCE: NS&I, 14/08/09

To stay abreast of current trends, news and comment on offseting mortgages visit the Offset Mortgage Blog.