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The way most mortgages work is pretty straight forward – you take out a loan with a mortgage lender and over time you repay that loan at a premium. But offset mortgages do not quite work in the same way.

Regular mortgages are secured loans which means they are a money loan secured on a home. That’s why it is quite cheap to borrow hundreds of thousands of pounds – a lender will give someone a loan for 3% or 4% because they know that should that borrow stop paying the mortgage, they can simply take the security, the home, and be reimbursed.

Offset mortgages use this idea and twist it, creating the strangest mortgages in the UK – mortgages that actually help people save money.

Because offset uses that idea of security and builds on it. With an offset mortgage, you secure lump sums of cash alongside the property, in affect making you a safer borrower because the lender knows that should you stop paying your mortgage then there is a property AND a cash lump sum to take back from. So they are happy to offer a cheaper rate, thanks to that added security.

And the more security you amass against the debt, the cheaper the loan becomes.

So if you keep increasing that lump sum, month by month, the rate at which you have to pay back your loan becomes cheaper and cheaper – thus offset is the only mortgage that can save you money each month.

Talk to an offset mortgage adviser about using your savings for more than just the tiny returns they are making right now – invest your home and your money into the strangest and most rewarding mortgage in the UK.

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

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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

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The old adage that ‘if you look after the pennies the pounds will take care of themselves’ may not be true in the 21st century but the message is worth bearing in mind as Brits look for other ways to make their money work for them.

With instant access savings accounts now paying an average of just under 0.75% according to the latest research from moneynet.co.uk, it’s important for consumers to explore alternative savings products in an effort to get a half decent return on their cash.

There are better rates available if you’re prepared to consider putting a regular sum of cash away on a monthly basis. Whilst it may seem like too much hassle, in reality it’s pretty straightforward and a few minutes work can see you handsomely rewarded each month. One of the best vehicles to put the cash in is an offset mortgage – the more you save into the mortgage, the less you pay.

It’s easy to use as well – a good offset mortgage broker will help you link any number of instant or fixed savings accounts or ISAs into the mortgage. So you do not even need to change all your finances to be able to make the most of offset.

If you can save a little each month, maybe £100 or more, it all adds up – on top of your existing savings that extra cash will go towards reducing the rate of your mortgage. By the end of the year you will have found that a chunk of your original repayment rate will have disappeared and your outgoings will have shrunk. Of course if you keep up with the original repayments then you will overpay into your mortgage and will reduce your rate by even more.

Offset works best when it is constantly managed. That isn’t always an easy task and it needs the guidance of a professional offset mortgage adviser, but it is possible and many people in the UK can tell you that it does work.

SOURCE: Moneynet.co.uk, 23/02/10

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

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If you do not feel like you control your own finances and feel like they are in control of you then you need to invest in a mortgage where you are the boss and you call the shots, every month.

It’s a common dilemma to be in – more than half of Britons aged 35 and 45 do not feel fully in control of their finances, according to a new survey commissioned by F&C Investments.

The study found that overall, just under 50% said they felt in control of their finances, with a little over 36% saying they felt a degree of control and 14% saying they did not feel at all in control.

Almost a third of respondents with borrowings were either a little worried about their level of debt or were actually finding it hard to keep up repayments. However, nationwide more than half of respondents had either no borrowings at all, or none apart from their mortgage. Interestingly, almost a third have enough ‘rainy day’ cash on deposit to fund several months’ outgoings.

Scott Stevens, head of global wholesale and marketing at F&C Investments, says: “While some of the results of this survey are encouraging, there is a real need for people in this age group to sort their financial lives out.”

With a flexible offset mortgage, the ball is always in your court. You can decide how much you can afford to save each month, how much to pay and how much money you need to take from your property. Of course, you have to work within the guidelines of the mortgage and within the advice of a good mortgage adviser, but a flexible mortgage does what it says on the tin – it fits around you.

So take control of your finances – make sure you are the boss of your debt, your savings and your outgoings each month by tailoring a flexible offset mortgage around your needs.

SOURCE: F&C, 18/02/10

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

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Thanks to the Bank of England deciding to keep interest rates at 0.5% for the 11th month in a row, 76% of investors have had enough of dismal savings rates and say they are not interested in investing in cash.

Fair Investment has found more than three quarters of investors would prefer to put their money into riskier investment options in the hope of better returns than put it into a savings account or an ISA.

Nick Scarrett, head of pensions and investments at Fair Investment says: “With the average cash ISA rate at just 2.12% and easy access savings accounts paying out just 0.76% on average, it is no wonder that most people looking to invest are steering away from cash in order to get better returns.”

It’s sad that people are forced to move their money into risky investments for any sort of return. The problem is, the riskier the investment the greater chance of losing money. For people who rely on their savings for income, that’s unacceptable.

When asked what type of investment product they were most likely to opt for almost half of those respondents choosing structured products. This is incredible – structured products have hit the headlines over the last few months thanks to their high risks. These investments are complicated, risky and while some have returned a lot of money to investors, many people have lost everything in them.

Fair Investment also says nearly a quarter of investors would choose equity funds, while a fifth said they would opt for corporate bond funds as their preferred investment type. While these are slightly safer, there few guarantees with such investments.

The only place you can be sure that your money will remain safe and will make money each and every month is through an offset mortgage. The low rate environment actually makes them an even better investment because the goal of an offset is a lower rate at the end of the month, which means a lower repayment and more money saved – it’s a reverse savings product, but one that works and more importantly, one that is safe.

SOURCE: Fair Investment, 04/02/10

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

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In a recent speech, Conservative shadow chancellor George Osborne said: “Our new economic model will be built on long term saving and investment” – make sure your personal economic model is too with an offset mortgage.

For years now people have used their homes like cash machines – a few years of frivolous spending followed by a quick remortgage or secured loan using the increased equity in their home to pay off the debt. That happened the country over, and it is one of the reasons why we fell into economic difficulties, personally and as a nation.

But those days are over. We need to build our finances on savings and investments, not debt and borrowing. To do that people need to find ways to save, not spend and we need to be incentivised to save each and every month.

The answer to that is an offset mortgage. A mortgage that actually gets cheaper the more you save against it – as you offset money against it each month, the rate reduces because you are increasing your security and reducing your risk, allowing the bank to afford a lower rate of repayment.

It’s also a tax-free saving solution – because the money you save against the mortgage accrues no interest, you don’t need to pay any tax from the benefits you receive from it. What other investment could offer the same incentivisation?

If you want your own economic model to be based on savings and investment rather than spending and borrowing ask a mortgage broker about taking out an offset mortgage to help you save and invest in your future.

SOURCE: Conservatives, 02/02/10

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

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New research has found that women will be more savvy savers this year as they spend less and check bank balances more – this new attitude could make for some great offset savers in 2010.

The Co-operative Bank has found that three quarters of women will not be splashing out on impulse buys this year – over two fifths of women are planning to spend less on clothes, fashion accessories and eating out alone. When looking at broader attitudes to spending, the research also found that over three quarters of women have recently tried to cut back on their spending and believe they have become savvier with the way they spend their money as a direct result of the economic uncertainty.

To make the most of your offset you need to invest as much as you can, every month. This means taking some tough decisions when it comes to your lifestyle – so it’s great to see that a lot of women are becoming more savings-concious. It’s not easy, but the rewards will be worth it every time that mortgage statement comes in at the end of the month.

The findings also found that women are taking a greater interest in their bank balances, with the majority of women now more likely to open a bank statement and read it than this time last year, and a third of women also regularly going online to check their balance.

Offset needs to be managed all the time. So for more people to now recognise the importance of checking statements and being always aware of their financial situation is great as it means more potentially successful offset mortgage borrowers.

John Hughes, director of retail products for The Co-operative Bank, says: “The research clearly demonstrates that women are now much savvier with the way they spend and save their money. They are sticking to a budget and paying greater attention n to their bank balances.

“Saving can be hard immediately after the festive period but saving regularly throughout the year can make a big difference in the long run, whether saving for a specific event like a summer holiday or just for a rainy day.”

SOURCE: Co-Op, 26/01/10

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

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Can you imagine a world without credit card debt? It might be a far-off dream but it can be a reality by using an offset current account loan.

We all have credit cards and we all wish we didn’t – they can be the bane of our lives. As soon as you think you have saved enough to pay one off, something happens and you have to spend on it. Or you might be struggling to get anywhere near paying down the debt, just spending each month just paying off the interest.

But there is a way out of the credit card trap – taking out an offset current account means you can consolidate all your credit card balance onto your mortgage, leaving you credit card debt free.

But surely moving one debt onto another debt is a short term solution? Not with an offset current account – because the rate of an offset account is much lower than any credit card debt, you will save money each month. Also, you must pay your mortgage every month so by consolidating you are merely reducing your outgoings, which any professional will tell you is key to making the most of your money.

So talk to a mortgage broker about taking out an offset current account and clearing your burdensome credit card debt. In a world without credit cards you will have more money to save, more money to reduce your mortgage and less stress each month.

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

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You may be keen to make sure your savings within your offset mortgage grow this year – but it might be prudent to protect you assets first.

For too long Brits have been hell-bent on making more money without thinking about what could happen to them. Advisers and lenders alike have also been complacent when it came to urging borrowers to protect their assets before they thought making them grow – but now is the time to realign your priorities.

Offset is a great way to make your money work hard, but what would happen to all that money should you die? In the unlikely event that you die unexpectedly would your money find its way into the right hands?

Not many people know about the intricacies of estate planning and death taxes. Few understand that without trusts and wills money can be tied up for months and years and may eventually dwindle to nothing after the taxman has had his bite of your assets. This could lead to your family being indebted without you there to protect them.

Talk to an adviser about protecting your assets for your loved ones. You could work hard all year, saving diligently and making the most of your offset loan – but if your family are not the ultimate beneficiaries of that wealth then what is the point?

It does not take long and it needn’t be expensive to have your finances locked down and secured for future generations. Mortgages, savings, life insurance, assets – everything can be protected and looked after legally should you die suddenly. So don’t take the chance, make sure your family benefits from your wealth, whatever happen to you.

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

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No other mortgage is quite so engineered for the 21st century as an offset loan – if you want a truly modern, online mortgage then opt for the loan that you can control 24/7.

Online finances are now the norm – it is just 12 years since internet banking began, but its popularity has grown so much that, in the first half of 2009, 22 million adults used internet banking on their main current account, according to the UK Payments Administration.

Some of these users were logging on to their offset mortgage account. A truly online mortgage, offset allows you to manage your money and your loans at the same time. It allows you to move money, assess balances and plan your future finances by showing you how much you have saved against your mortgage, how much you owe and how much you could save by investing more.

Offset works best when managed 24/7 – the more money you can save and move against your loan, the lower your repayment at the end of the month. This might seem like a tough challenge, but with Internet banking, your mortgage can be managed with the click of a button.

It’s perfectly safe too – for the first time ever this year, more than 50 per cent of regular UK Internet users are banking online. The most popular tasks that people who bank online carry out on their main current account are checking account balances and checking statements. People are taking charge of their money and making the most of it, whenever and wherever they are.

If you want to be able to control your mortgage and your money at the same time, talk to an offset mortgage adviser about taking out an offset loan. Talk to them about the potential for Internet banking and ask them how best to manage your money online so as to have the cheapest mortgage possible.

SOURCE: UK Payments Administration, 13/01/10

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