Many savings rates have tumbled over the last few months as lenders try and offer cheaper mortgages – with an offset you can have the best of both worlds.

At the moment, in order to maintain their balance sheets, banks can either offer competitive mortgage or saving deals, not both. And according to Moneyfacts, since November 2009 mortgage rates have been reducing, but in order to fund these cuts savings rates have fallen too.

Michelle Slade at Moneyfacts says: “Providers have moved their focus to the more profitable mortgage market, with savings rates being reduced to fund mortgage cuts and those who really on their savings to supplement their income being hardest hit.
 
“It is already virtually impossible for savers to find an account paying a positive real return after tax and inflation and falling rates are only going to exacerbate the situation.”
 
With an offset mortgage you can have it all – you can save money each month and you can have a cheap mortgage rate. Because with offset you don’t need to worry about cheap savings rates, you save money by reducing your mortgage rate each month through increased savings.

So if you are sick of looking for the impossible combination of high savings rates and low mortgage rates, talk to an offset expert about taking out a loan that saves you money while also giving you a low rate of mortgage repayment, giving you everything that you need.

SOURCE: Moneyfacts, 09/03/10

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