In a recent speech, Conservative shadow chancellor George Osborne said: “Our new economic model will be built on long term saving and investment” – make sure your personal economic model is too with an offset mortgage.

For years now people have used their homes like cash machines – a few years of frivolous spending followed by a quick remortgage or secured loan using the increased equity in their home to pay off the debt. That happened the country over, and it is one of the reasons why we fell into economic difficulties, personally and as a nation.

But those days are over. We need to build our finances on savings and investments, not debt and borrowing. To do that people need to find ways to save, not spend and we need to be incentivised to save each and every month.

The answer to that is an offset mortgage. A mortgage that actually gets cheaper the more you save against it – as you offset money against it each month, the rate reduces because you are increasing your security and reducing your risk, allowing the bank to afford a lower rate of repayment.

It’s also a tax-free saving solution – because the money you save against the mortgage accrues no interest, you don’t need to pay any tax from the benefits you receive from it. What other investment could offer the same incentivisation?

If you want your own economic model to be based on savings and investment rather than spending and borrowing ask a mortgage broker about taking out an offset mortgage to help you save and invest in your future.

SOURCE: Conservatives, 02/02/10

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