Offset mortgages are always advertised as the best vehicle for saving money, and they are – but offset mortgages are as good at handling debt as they are handling savings.

Offset current accounts do not work like other offset mortgages. Where the more commonplace offset uses piles of savings to reduce liability on debt, an offset current account works like a giant overdraft – the mortgage debt becomes a ‘minus’ on a bank account with a monthly rate of repayment. But it’s like an offset because the more money you invest into the account, the smaller the ‘overdraft’ becomes and the less the rate of repayment.

This type of loan is great for people with unsecured debts because any credit card, loan or store card balances can be moved onto the offset current account. It increases how much you owe and it will increase your monthly rate of interest but it helps borrowers because it turns multiple, expensive debts into one, secured, affordable debt.

Talk to a financial adviser about using a flexible loan as a means to consolidate your debts. Servicing multiple debts can be expensive and can leave you with precious little funds to save and to actually pay down the burdensome debt. By using an offset current account you can reduce your outgoings and give yourself some room to finally pay down debt and eventually save some money.

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