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Offset mortgages can help you save money or even pay off your mortgage faster – but they can also be used to help your kids onto the property ladder.

It’s never been harder for first-time buyers to get their first mortgage – research from Moneysupermarket.com found average deposit for a first time buyer is £32,000. That’s a money mountain that most cannot climb – but parents can help by helping their kids use an offset mortgage.

Louise Cuming, head of mortgages at Moneysupermarket.com says: “It’s easy to see why only 13% of under 34 year olds are planning to get on to the housing ladder at the moment. The need for such a high deposit is pricing many people out of the market. The obsession with equity that has gripped mortgage lenders over the last couple of years has hit first-time buyers hardest.”

One type of offset mortgage is the family offset mortgage – essentially your savings are used against your kids’ home. This mortgages will make sure your kids can have the start they deserve and it means you can help your kids without actually spending all your savings.

So their security comes from your money – a decent amount of savings offset against a first-time buyer mortgage means your kids would only need to save a fraction of the £32,000 usually needed. This gives them more room to save for themselves, it gives them a future and it puts your money to good use.

And, over the years, you can start to take your money back if you wish, letting your kids save their own nest egg. Alternatively you may not want the money back – it’s your choice, but with offset you have the flexibility to decide what to do with your money.

SOURCE: Moneysupermarket.com, 17/07/09

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