If you are self employed, it’s probably been a pretty tough year and it probably not very easy to get hold of a mortgage – but you could take advantage of a current account offset mortgage and save yourself a fortune in the long run.

According to the Office of National Statistics, more than 3.5 million people are now self-employed – people are setting up consultancies, agencies and doing freelance work in the service sectors. They are builders, plumbers and electricians, or they are taxi drivers or own their own shop. They might have their own restaurant or they might do a million other jobs whereby they are their own boss – but for them it’s tough to get a mortgage.

Self cert mortgages are all but extinct in this post-credit crunch world. Lenders are unwilling to take the risk of someone who cannot prove their income with a PAYE. This is infuriating to millions of hard working people who earn more than enough to pay for a mortgage.

But there are always alternatives to self cert mortgages for the self employed – and one of them is a current account offset mortgage. And there are many reasons why.

Using current account mortgages, these self employed borrowers can avoid the headache of finding the money to pay their tax bills – they can pay everything they make into a current account mortgage and then put aside what they need for taxes at the end of the year. While this money sits in their account, it reduces the outstanding loan and their monthly interest rate payments. So when it comes to paying the taxman, they may have almost saved enough so as it’s not a financial burden at all.

Of course, any money that is in a current account mortgage is exempt from Income Tax, as it is regarded as a mortgage rather than a savings account. So any money you save is tax-free.

Talk to a mortgage adviser about your options if you are a self employed person.You might find that moving your mortgage into a current account offset is a great way of getting through the financial downturn.

SOURCE: ONS, June 2008

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