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Yorkshire building society has found that its offset products are very popular with parents wanting to help out their children with mortgage payments.

Some offset mortgages enable family members or friends to link their savings account to the borrower’s offset mortgage. No interest is paid to the saver but any savings put towards an offset mortgage will be helping the borrower to pay less every month or to reduce the term of their mortgage considerably, for very little sacrifice of savings interest.

This is the modern Bank of Mum and Dad, where parents can help their kids onto the property ladder in a sensible way. And, when the kids can stand on their own two feet, Mum and Dad will not have spent a penny.

Chris Edwards, head of mortgages and savings at Yorkshire says: “With interest rates at an all time low it’s great news that customers are realising the benefits of offsetting savings to their mortgage. The success we are seeing with our offset account doesn’t surprise me as it’s a really good way to help a family member or friend with their mortgage without having to hand over large sums of money.

“With offset, the money is not actually given to the borrower, instead it is deposited into the saver’s separate savings account, which is linked to the offset mortgage. The saver retains full control of their money and is able to make withdrawals and deposits at anytime in the usual way.

“Offsetting is also very tax-efficient, especially for higher-rate taxpayers as savers don’t earn any interest on their savings so they do not pay any tax on their offset plus savings either.”

SOURCE: Yorkshire, 21/05/09

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

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One of the best things about offset is that with it you can become recession proof – using your earnings and your savings against your home to make you safer if anything were to go wrong.

You can use your offset amount, maybe in a current account or in a special offset account, to save enough money to cover several months’ mortgage payments if you found yourself unable to earn.

And being a great incentive to save, it will be less of a hassle to look at monthly outgoings and consider any cost savings which can be made and add these to your mortgage. It’s all financial insulation for if things take a turn for the worse.

You could try to make mortgage overpayments now to provide a cushion for the future. As long as you keep saving with offset, and keep paying the same amount each month, you will begin to overpay more and more.

Also, another way to become recession-proof with offset is to consolidate any debts into the offset account. Paying off credit cards and unsecured loans when you can will be a lifesaver if you become unemployed or lose some earnings.

Also, most importantly, talk to a mortgage adviser and ask them to help you make the most of existing financial arrangements, and to obtain help in understanding anything else you could do to become an offset recession-proof borrower.

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