» Read the complete article

If you are finding it hard to save as much as you’d like you might want to consider taking out an offset loan to help you save more every month while at the same time reducing your mortgage.

It has been hard to save during this economic slump – we might be out of the recession, but according to National Savings & Investments, the British public is now setting aside just 6.25% of their wages – the lowest level since summer 2007. In pounds, average savings have fallen from £90.12 twelve months ago to £81.94.

Only 44% of people say they have been regularly saving any money over the last few months. Over the past five years, this figure has fluctuated between 47% and 55%, so this is one of the lowest ever recorded levels. Also, the amount of money ‘regular’ savers set aside each month has fallen below £200 for the first time in over a year to £195.08.

It’s hard to save when there is little chance of bonuses or raises. But with an offset as you save, you reduce your outgoings for the next month because your mortgage rate has been reduced. So with an offset you can be sure that you will be able to save even more next month even without the promise of more money from your job.

Tim Mack at NS&I says: “With the new financial year approaching, now is a good time for people to take a closer look at their finances and set themselves savings goals for the year ahead.”

SOURCE: NS&I, 03/03/10

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

» Read the complete article

Scots must return to the traditional values of thrift and prudence according to a new report from Aegon – values that are core to the benefits of offset mortgages.

A major study of Scottish savings habits conducted by Aegon has found evidence of worryingly low levels of short-term saving, even in higher income groups. More than four out of ten households have no savings or investments and the figure only rises to just under a quarter in households earning over £30,000 a year.

It is generally accepted people of working age should have ‘rainy day’ savings of between three and six months of expenditure of earnings – but these findings suggest many Scots fall far short of having this financial cushion. It’s a cushion that can be easy achieved and more importantly maintained with an offset mortgage. By offsetting money against the home loan, rates are reduced and more money can be saved and reinvested, every month.

Also, the report indicates retired Scots have been less successful than their English counterparts in saving for a pension as a significantly higher proportion of Scottish pensioners claim Pension Credit than in other parts of Great Britain. Again, offset can solve this problem – many people do not save in a pension, but building a nest egg with an offset can be a great way to start building up a long-term financial pot.

Stewart Ritchie, a former Aegon director who helped put together the report, says: “It’s time to return to the traditional Scottish values of thrift and prudence. Scots haven’t been putting away enough money in the good years and there’s a clear evidence of a worrying lack of ‘rainy day’ savings. This doesn’t bode well for those who lose their jobs in the current recession.

“For too long people have relied on an expectation houses will go up in value and stocks and shares will rise and that capital gain will therefore provide them with retirement savings. The credit crunch has shown this to be a dangerous assumption. Scots have to get used to the idea that the easy path to wealth through capital gain will have to be replaced by a return to more traditional savings habits.”

Offset can help Scots save. It can help English people save, and it can also help Welsh and Northern Irish people save – in fact, offset can help people put money away every week from all corners of the United Kingdom. So whatever corner of the country you are from, talk to a mortgage adviser about saving with offset.

SOURCE: Aegon, 02/11/09

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

» Read the complete article

Many people see their home as their pension, and in the past that was fine – but now, in this new age of unreliable house prices and limited equity it’s time to think differently.

The Government recently revealed its proposals to change the mortgage market – it wants to ensure mortgages are safer, that people can afford them and that they are fair. But the Financial Services Authority, the regulator of the mortgage industry for the Government, says a new mortgage world means not using a home as an investment.

In its mortgage discussion paper, the FSA suggested that consumers should be re-educated “away from the idea of seeing property as an investment”.

This is true – you cannot rely on homes to carry on increasing in value as a means of guaranteeing a nest egg in old age – these past two years have proven that house prices can fall as quickly as they rise. But homes can be used as a savings vehicle instead of an investment.

By using your offset loan to build a nest egg alongside it, using a savings plan put together with a financial adviser, you reduce your rate each month and you save for another day. This lump sum can even be invested in an ISA, which offers savers big tax breaks.

No one should rely on their home as an investment – having savings as you get older is paramount, so you need to know they are there for when you need them. But using your home as a means to save is a great way of investing and reducing your outgoings. Talk to a mortgage adviser about using a mortgage debt to save for your future.

SOURCE: FSA, 19/10/09

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

» Read the complete article

Offset mortgages are always put into the ‘niche’ category of mortgages, alongside self-build, self-cert and buy-to-let, but offset shouldn’t be niche – it could improve the lives of millions of people.

Niche means an area that is only of interest and only suitable for a small, select group, and that’s fine for many mortgage types. Self-cert mortgages are only good for those who cannot prove their income, self-build mortgages are only good for those who want to build their own house and buy-to-let is only good for those looking to invest and rent out a property. But offset is much more than niche – offset could work for a large percentage of the population.

Offset allows you to take lump sums of money and ‘offset’ them against your mortgage. For example, a £100,000 mortgage, with £25,000 offset against it would mean the rate or even the term of the loan would reflect that of a £75,000 mortgage. The £25,000 has not moved and has not been spent – it’s just sitting there, as security.

With this type of loan, many choose to overpay – they continue to pay a rate that reflects the original £100,000 loan, not the new £75,000 offset amount. So each month they add towards their mortgage, shrinking the amount they owe and even the term of the mortgage.

But the loans are flexible – if the borrower finds themselves in difficulty then they can choose to pay at a rate reflect the £75,000 or even less, if the lender allows it. They can even overpay above and beyond the amount a £100,000 loan demands, reducing their debt by even more every month. There is also the chance for the borrower to stop paying completely for a short period, again if the lender allows it.

So all you need with an offset loan is savings, the ability to pay a mortgage and the desire to shrink your debt. Millions of Brits have savings and even more have the ability to pay – and everyone wants to shrink their debt. So is it niche? Not at all – offset, like any other mortgage type, may not be right for everyone but we are sure that it is right for millions of Brits looking to save and reduce their mortgage debt.

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

» Click here for the original article

If you have a flexible loan there isn’t a better time to take advantage of its options than now – but not enough people are maximising their financial potential.

Research by Unbiased.co.uk suggests that over half of tracker mortgage holders are still not taking advantage of historic low rates to overpay on their home loan. This is particularly worrying if any of these borrowers have a flexible mortgage that encourages overpayments – some mortgages will limit how much you can overpay, but flexible loans encourage flexible payments.

Of those not overpaying on their mortgages, one in four are using the extra money to pay off other debts, but one in five are frittering cost savings away, and 7% are even letting their current account balances build up.

If you have a flexible loan, overpaying means you reduce how much you pay each month, and it also means the term of your loan is reduced. Simply, it’s the best thing you can do for your mortgage.

David Elms, chief executive of Unbiased.co.uk comments: “Interest rates have plunged to record lows during this year, presenting an ideal opportunity to pay off their outstanding mortgage more quickly. Such action would enable many thousands of borrowers to take years off their mortgage repayment term, or enjoy a greater level of repayment comfort down the line, should the economy take longer to recover.

“But most tracker borrowers are not taking this action. If you are confused about how to best manage your mortgage and take advantage of low interest rates, professional and personal mortgage advice can make a clear difference. Only a whole of market mortgage adviser will be able to advise borrowers on the best deal for their circumstances.”

SOURCE: Unbiased.co.uk, 22/09/09

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

» Read the full story

Not many people know it, but there is a lot more to flexible mortgages than just offset loans – there are several lenders in the UK offering flexible mortgages for those who want finance to build their own home as well.

In fact, self-build mortgage specialist BuildStore has revealed a 39 per cent year-on-year increase in self-build finance enquiry levels throughout the last quarter – more people are realising that if they have the time, patience and expertise, there are a lot of benefits to building your own home.

Self-build mortgages work by offering the borrower lump sums through the house-building process. So the borrower might need a lump sum to buy the land, then smaller sums as the months go on so as to afford to build a property. Then, by the end of the process, the borrower has the home of their dreams and a working mortgage to pay off.

BuildStore chief executive Raymond Connor says: “We have always recognised the appetite for self-build, but with the current market conditions, there is now a real demand from frustrated homeowners wanting to build their way out of the recession.

“With certain conditions appearing to favour the self builder, such as increased land availability, falling land prices, and plenty of tradesmen looking for work, it is vital to have the right type of funding available. BuildStore continues to work with a number of lenders to widen the availability of self build lending to help meet the current demand from prospective homebuilders.”

Of course, there is nothing simple about building your own home. It’s a tough process that can cost more than you think, take longer than you think and will probably lead to a few more grey hairs. But many people still take up the challenge each year – only after taking a lot of advice from professional across the housing industry, including a good mortgage adviser. Self-build loans need a lot of time, a lot of planning and a lot of experienced advice if they are to work as they should.

SOURCE: BuildStore, 16/07/09

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

» Read the full story

2008 has been a tough year for mortgage holders. Rates are on the rise and more people are coming to the end of their cheap, easy two-year fixed rate products. So there are going to be a few rate shocks: many homeowners could see their mortgages rising by hundreds of pounds a month. That’s why flexible remortgages are so important for homeowners in 2008. Flexible remortgages can give mortgage holders the chance to get used to the new way of things and allow them to adjust to a radical new mortgage world. So if you are coming to the end of your mortgage, maybe you need a mortgage that can work round your changing situation.

Read more about Flexible Remortgages

» Read the full story

Many mortgages may seem like they are a financial coffin – unrelenting payments again and again every month, regardless of how your life is going. If you are in financial difficulty, or just want to take control of your finances it might seem like the mortgage chain around your neck is heavier than ever. But there is an option for those who want to take charge – flexible finance. It will let you take control of your money, your mortgage and your financial life. It might not save you much money, but it will save you a lot of stress and strain. So choose flexible finance on your home and become your own financial boss.

Read more on the benefits of Flexible Finance

» Click here for the original article

Mortgage interest rates are on the up, there is no doubt about that. Thanks to tightening credit limits mortgage lenders have had to resort to putting up rates by several percentage points. Which in real terms means a big hike in your monthly mortgage bill and with rising energy, food and fuel costs, mortgage hikes are the last things any homeowner wants. But what about the interest rates on flexible mortgages? Aren’t they any different, because these are flexible deals, shouldnt they be immune to mortgage rate changes? Or are they different, will interest rates on flexible mortgages be hit harder than other deals?

Find out more on Interest Rates on Flexible Mortgages

» Read the complete article

After shopping for a mortgage for a short time you will have discovered that finding the best mortgage is a bit of a balancing act, you want a low rate but you also want flexibility and they never go together. A low rate mortgage will be loaded with fees, limitations and nasty clauses while a flexible mortgage that offers breaks and reduced fees will invariably have a much higher rate. So can you have both? Where can you go to find low rate flexible mortgages, deals that will work with all the changes in your life but will not break the bank? Or is this just too much to ask? Are low rate flexible mortgages just a mortgage white whale?

Find out more about Low Rate Flexible Mortgages