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When you get your bank statement in each month you may notice that you earn a tiny bit of interest on your balance – but did you know that your day-to-day current account can be used for so much more?

The interest accrued on current accounts is miniscule – you may make as much as a few pence from your month’s money. It’s nothing to write home about and it’s disconcerting to think that your money, which you worked so hard for, isn’t working hard for you.

But it can with an offset mortgage – a current account linked mortgage will use your day-to-day bank account and help you save money at the end of each month.

Essentially a current account balance is offset against your loan in much the same way that your savings would be – the more you have offset against the mortgage, the lower the rate. And that’s calculated daily, so the more money you have saved for the more days, the bigger the ‘average’ offset. So if you can offset as much as you can against your mortgage for as long as you can, you will save money.

This means making your account work for you – move your direct debits so as to leave your account at the end of the month instead of the start, try and put off big purchases until the end of the month or even use a low limit credit card to pay for day-to-day things like petrol and food, paying it off at the end of the month.

Doing all this will mean your balance stays higher for longer, and the more you have offset against your mortgage for the month, so the cheaper the rate.

This low rate environment is making it harder than ever to make your money work for you, so you have to be proactive. Talk to your mortgage adviser about the great innovative offset mortgages that are available on the market right now.

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

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People need to think of the short, medium and long term when it comes to their finances – they need to begin looking after their money and thinking how they can benefit from saving, rather than spending.

The key is to look to the long term. Many people will be living longer and will need more to sustain them through old age. That means building a nest egg now, rather than struggling when you get to an age when you can’t work. An offset mortgage is a great way of doing this – it allows you to build that nest egg but at the same time it deals with the short term by reducing the amount you pay on your mortgage each month at the same time.

The Association of British Insurers has recently come out with a Savings Manifesto as it looks to put the message out there that saving is crucial. Stephen Haddrill, director general of the ABI, says: “Our research this year shows that over 40% of people are either saving far too little, or nothing at all, for their retirement, while the vast majority of the UK’s population has little or no protection in place to help them cope with unemployment or other unexpected financial shocks. We need a culture of personal responsibility based on savings habits established early on in people’s lives.”

Of course, it’s all well and good looking after your long-term needs by saving, but what’s looking after you and your money? Good insurance is key when planning your finances now, or for 20 years’ time.

Protecting against loss of earnings, illness, injury or even death can save you and your family a lot of money and a lot of heartache. For just a few pounds each month you can be sure that you, your family and your plans are safe.

All this, offset mortgages and protection, can be found through a good offset mortgage adviser. they can help you find the right offset flexible loan to fit your short-term and long-term needs and they can set you up with some affordable insurance so as you can protect your ability to work, your home, your money and your family’s well being.

SOURCE: ABI, 13/10/09

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

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In the last Budget, the Chancellor Alistair Darling spelled out new plans to help people with an ISA – a little product that could save even more money when linked to an offset mortgage.

ISAs were created by the Government at the start of the 21st century to help people save more, tax-free. Essentially they are vehicles whereby you invest a certain amount and all the profits are tax-free.

In the past, the £7,200 tax-free ISA limit was up to £3,600 in cash and the entire £7,200 available in stocks and shares – you could invest as much as half your £7,200 ISA in cash and the rest in stocks, or invest the whole £7,200 in stocks. This doubled in the case of couples, giving them a limit of £14,400 between them. Any profits made on this investment are tax-free – so cashing in on your ISA to the limit can save you a lot of money over the year.

But things are soon to get even better – thanks to the new Budget plans, those over 50 will have their ISA limit increased to £10,200 by this month, and everyone else will have their limits increased next year – for couples that’s more than £20,000 of tax-free savings. So that means for those over 50, it’s time to consider using the extra £3000 ISA limit to make the most of tax breaks – you can invest up to £5,100 in cash or invest the whole £10,200 in stocks – it’s up to you and your adviser.

You can also link these investments to your offset mortgage – over 50s can now link as much as £10,200 as means of reducing their mortgage loan as well as any income from the ISA during the year being tax-free.

So talk to your adviser about your new ISA limits and how much tax you are in line to save. Offset has been a great way to make the most of your money, tax-free, and now you can add a tax-free savings vehicle on top of that.

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

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Two recent house price indexes have found the UK property market to be regaining a little momentum with continued price increases – but what does this mean to offset borrowers?

The latest house price index from Nationwide found that house prices increased by 1.6% in August this year, the fourth month in a row that house prices have increased. It also found that year-on-year figures show that house prices are less than 3% down on what they were 12 months ago – meaning prices are likely to be back in the black by the end of 2009.

Also, the Land Registry found that house prices had increased by 1.7% in July, the largest amount its index has jumped in a single month for five years.

So what does this all mean for you? Well simply, it means you have more money to play with – as equity in your home increases, so does your lump sum’s potential. Since the credit crunch began, people who have been investing into their offset have been seeing their saved lump sums mean less as house prices crumble.

But now, as prices begin to slowly rise, they can be safe in the knowledge that their lump sums are doing even more – the bigger percentage of your home you own, the less you owe, which means your offset has a bigger affect on your remaining mortgage.

So while we are not out of the woods yet – the Land Registry, whose data collection differs from Nationwide says year-on-year house prices are still nearly 12% down on prices 12 months ago – house prices are rising. This will hopefully get more offset mortgage holders saving as they begin to see even better returns from their investment.

SOURCE: Nationwide, 26/08/09, Land Registry, 28/08/09

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

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It feels like the gloomiest economy ever, but savvy money managers stand to benefit in these tough times – offset provider first direct has developed guidelines and tips designed to help them beat the credit crunch.

The first thing to do is to stay on top of your finances – first direct research reveals that 17 million people have lost track of their rate of interest on savings, while 43% of homeowners don’t know what interest they are currently paying on their mortgage. Keeping a close eye on interest rates will allow you to manage your finances better and ensure you are getting the best deal.

Home-owners with a pot of savings can reap rewards by switching to an offset mortgage. Offsetting could see a typical home-owner cut down the length of a £100,000 mortgage by close to three years, and save £18,322 in interest payments over the lifetime of a mortgage.

As well as helping borrowers repay mortgages faster, offsetting will also prevent savings languishing in under-performing taxable accounts. The average home-owner earns 4.6% on savings held in an offset mortgage, compared to just 0.18% return on a typical savings account, according to the bank.

The crash in interest rates from 5.5% to 0.5% over the past year could spell a windfall for home-owners – many borrowers now find themselves in the strong position of paying far less in interest payments. Any good adviser will tell these borrowers to consider overpaying – If their monthly payments has dropped, borrowers should continue paying at their existing rate – it will reduce their debt quicker and they shouldn’t even notice the difference.

first direct says: “We’re chipping away at record amounts of mortgage debt, with savvy savers starting to take advantage of the benefits of offsetting – our research reveals that new offset lending rose16 per cent in the last three months of 2008. In fact, offset mortgage lending now accounts for £1 in every £10 being lent to UK mortgage holders. In the past three years, 400,000 new offset mortgages have been issued, taking the amount of UK home-owners with an offset mortgage to 1.1 million.”

SOURCE: First Direct, 11/06/09

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

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The percentage of Brits who say they have no money to save increased from 50% in 2008 to a massive 85% in 2009 as the daily cost of living and the burden of debt increases.

Research from Scottish Widows has revealed that the nation’s savings behaviour is being severely affected by this year’s unprecedented economic environment. The biggest obstacle is the daily cost of living, as 75% believe this is a particular barrier for them. Also, the burden of debt on people’s pockets continues to impact as well, with 42% citing it as a barrier to saving this year, compared to just 32% last year.

Anne Young, savings expert at Scottish Widows says: “The rise in the number of people saying they have no money to save is alarming. It has become more of a priority for people to reduce their current debts and simply get by on a day to day basis rather than saving for their futures.

“However while paying off debts should still be a priority, in climates like these, it is important to save even a small amount now to get into a saving habit and build up some capital. And we should all regularly review what we are doing as our ability to pay debts and save can change.”

For those who have no money to save, almost a third say high taxes are a factor that prevents them from saving. Half of all respondents believe they would be encouraged to save, or begin saving if there were tax relief on all their savings.

There is an answer – offset mortgages. Not only will offset help with debts, but offset is a tax-free savings vehicle. It also offers savings each and every month if money is invested into the mortgage, meaning there is an added incentive to find money, which is all it would take for some people to save that little bit more.

There is no excuse for not saving if you opt for an offset. Money might be tight right now, but saving with an offset means you are saving for yourself and for your future.

SOURCE: Scottish Widows, 01/06/09

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

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If you are thinking about offset you have to be ready to become the ultimate, disciplined borrower – which could mean a whole new way of borrowing and saving.

Offset works best when you keep saving. But saving every month is tough – if you are only being asked to pay £500 a month for your mortgage interest payments, would you have the discipline to pay £600, or even £800? It’s tough, but that’s how offset works.

Without the discipline, offset essentially becomes an interest-only mortgage, which means you will find it a lot harder to pay off. Also, offset rates, without the saving, aren’t the best rates. They rely on investment and flexible payment, so you have to be sure you can feed your mortgage month after month.

That means asking your adviser to help you put together a plan that will help you save, and help you feed your offset mortgage. An adviser will help you strike a balance between saving just enough and not over-stretching yourself – an adviser may even introduce you to other products that will help you save, like ISAs and investment vehicles.

But at the end of the day, you are in charge of your offset. You have to push yourself and be as disciplined every single month. But the rewards are worth it – savings in your pocket, which are tax-free, every single month. You will also find that your credit score rockets and your mortgage loan decreases.

Nothing pushes people like the incentive of saving and the incentive of debt reduction. And offset can offer that, albeit with some sacrifice. Ask your adviser for help and ask them to outline what offset will exactly be worth to you.

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

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If you have come into a lot of money one of your first thoughts may have been to pay off your mortgage as soon as you can – but is that the best decision?

Windfalls do not come around very often, and when they do come along, you have to be very careful about how you spend your money. So paying off your mortgage would seem like a really sensible idea? No more monthly payments, 100% security for life and a definite asset that can be passed on to your family. It’s the ultimate dream, but is it the right choice for your lump sum?

Because if you pay off your mortgage, and your home depreciates, you have lost some of your money. Also, what if something happens and you need money fast? It will take time to seek out another mortgage and unlock some of the cash again. Paying off your mortgage means locking your money into your home.

However there is an alternative. By offsetting a lump sum against your mortgage, you in affect pay off the debt, but you keep your money close to hand. For example, if you offset enough against your mortgage you may end up paying very, very little for your mortgage each month. But the money doesn’t depreciate, it is always accessible and you are still 100% safe and secure.

There is no right answer when it comes to investing money with your mortgage. It might not be the right choice for everyone, but then again it might be a great way of securing your money and reducing your costs.

The only person who can give you the right answer is a fully qualified mortgage adviser. They will be able to point you in the right direction when it comes to financial products and they will do it by assessing you first. Then they fit the finances round your needs.

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

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More than four million home-owners are playing a waiting game, watching the fluctuating property market with an eagle eye so they can cash in on cheaper home-ownership before prices start to rise.

According to research from First Direct, UK homeowners waiting for the right moment to ‘trade up’ their houses are now sitting on a savings pot of £20.2bn, which is ready to be ploughed into the housing market when the time is right – the average Brit expects that time could be as soon as October 2010.

But the waiting game has an emotional impact on the nation – a quarter feel lucky to be able to take advantage of a falling market and snap up houses while prices are low. Close to one in five are thrilled at the prospect of nabbing a bargain. However, for 20% of the nation, the waiting game is forcing them to postpone major life decisions such as marriage and children – and 12%  feel that they will never make it on to the property ladder with prices as they stand.

A spokesman for First Direct says: “If property is your preferred investment, it’s worth existing home-owners investigating offset mortgages as a savings option while they wait for the right time to invest.  With savings accounts paying such low rates of interest at the moment, offsets are looking particularly attractive.

“Swapping to an offset mortgage could cut down the length of a £100,000 25 year mortgage by almost three years and save £18,322 in interest payments over the lifetime of the mortgage.”

Sitting on a fortune may not be the right choice. Taking out an offset mortgage now, either on your existing property or on a new home, will start saving you money immediately – so even if house prices fall a bit more, you know you are making savings regardless. Then when the market returns later this year then you will be making a profit as your house price inflates alongside the generous monthly savings an offset mortgage can bring.

SOURCE: First Direct, 16/04/09

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

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People are looking in all different directions at the moment to make the most of their money – when all they have to do is look around them and realise their home is the best asset to invest in.

Fifty seven per cent of UK savers have split their money into more than one investment or savings product following the bailout of both HBOS and Royal Bank of Scotland and stock market volatility, research from Fairinvestment.co.uk has found.

In fact, the survey found that a quarter of savers have split their deposits in two, 13% have split them three ways and 8% have divided them between four separate products.

Sharon Bratley, financial expert at Fairinvestment.co.uk says: “Investing in different types of assets can diversify investments and reduce the level of risk overall. With interest rates as low as they are, investors are having to look at other options in order to meet their objectives.”

This is sensible, but why spread your investments anywhere? With an offset you can have your money sitting in one account, constantly reducing your mortgage repayments at the end of the month. And because you don’t accrue interest on the money, it’s a tax free saving. Your mortgage is the best asset to invest in.

Offset is also almost risk-free – the Government will cover any losses of any accounts you have up to £50,000. And if you have more than £50,000 offset, just split it between two or more accounts, and it will all be covered.

It is hard to find somewhere that is risk-adverse and is profitable for your money. But with offset, your money is safe and the savings are instant.

SOURCE: Fairinvestment.co.uk, 19/03/09

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