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It’s all well and good a mortgage adviser telling you to switch to an offset mortgage but until you release how much you can actually save by just moving around your money you may not be entirely convinced.

Offset mortgages work by taking a lump sum and offsetting it against your mortgage debt – £10,000 offset against a £150,000 mortgage would mean that you only have to pay the interest on £140,000 of the debt, for example.

And that’s a big saving – for example, if you took out a £150,000 offset lifetime tracker deal at 2.39% and made sure to have £10,000 in the offset savings account for the life of the loan then you would save a total of £3,418.

Compare that with £10,000 in a savings account where the rate of interest is less than 1% then it makes sense to go with an offset. Also, interest accrued in a savings account is taxed, but any money saved in an offset is tax free – that’s even more savings.

But that’s not all – in the previous example, not only would you make nearly £3,500 but you would also reduce the life of the mortgage by 1.6 years. So not only can you save more money with an offset mortgage, but you can also reduce the amount of debt you have in your life.

There are so many more benefits to offsetting your money against your mortgage, so ask a professional offset mortgage adviser about some more figures that make offset make sense.

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