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Thanks to the low bank rates and falling markets around the world there are still precious few places where someone can make a decent return on their money, that is except through offset mortgages.

As rates fall, as do mortgage rates, which mean anything you save through offsetting money against your mortgage is exacerbated by an initially lower rate. In a world where savings accounts are being slashed and stock markets are volatile, the only safe place to save money is in an offset mortgage.

And it’s just getting worse for savings rates – latest uSwitch.com savings analysis reveals 27 savings products across the market have had their rates cut by as much as 3% in the last month alone. It says that savings providers are still intent on cutting rates across their product ranges.

Rumina Hassam, savings expert at uSwitch.com says: “Savers haven’t had an easy ride over the last six months, and these latest rate cuts must be yet another bitter pill to swallow. Savers need to be aware that market leading rates across savings products are rarely around for long, with some only lasting a matter of weeks. Savers need to be agile – in this case good things don’t come to those who wait.”

If a saver has an offset mortgage, they needn’t be agile because they are in charge of their rate – if they save more, their rate reduces and they pay less of their loan or pay more of their debt. It’s a flexible saving mortgage where you are boss. You don’t have to worry about banks and building societies pulling good deals because every month can be a better deal with an offset.

So talk to a financial adviser about taking out an offset and leaving the savings rate rate race behind. We may have low rates for a while, so stop scrabbling around for a good savings rate and get hold of the best savings vehicle around.

SOURCE: uSwitch.com, 08/10/09

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