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It’s everyone dream – to be debt free and to be able to spend all your money on you and your family rather than on servicing debt. But how is that possible in the 21st century? A good place to start is by taking out an offset mortgage.

An offset mortgage works by using the security of a cash lump sum so as to lower the rate of interest on a mortgage. So if you have a £200,000 mortgage, but have £20,000 in savings then you only have to pay the interest on £180,000 of the debt. That may sound like a lot of interest to pay, but that could be a considerable saving each month and of course, the more you add to the nest egg, the lower the rate.

This means, with some good money management you can overpay on your mortgage. Overpaying is essentially paying too much interest each month, and with some mortgages it is not allowed. But with an offset loan it is encouraged – if you continue to pay what you would have if you were servicing a £200,000 loan rather than pay the cheaper £180,000 rate then that extra money is paid onto the debt, and reduces it.

This takes a good level of money management, and a certain amount of dedication – but to be completely debt free will take both of them and more. Offset just allows it to happen relatively pain-free.

Talk to an offset mortgage expert about what it would take to reduce your mortgage. They will help you organise a budget and will help you project how you would manage with a loan reduction plan. It sounds challenging, but if you are serious about building up your equity then a good offset mortgage expert will help you at every step of the way.

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

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A fifth of Brits could do with taking out an offset mortgage to encourage them to save because right now they are saving nothing at all.

Nationwide has found that in January 2010, the number of regular and occasional savers increased to 79% – the highest since September 2008. But one fifth of people still not saving at all.

Andy Hutchinson, head of savings at Nationwide, says: “Although there is still a lot of room for improvement, it is nonetheless encouraging to see a rise in the number of savers in January 2010.”

It is encouraging but in this new era of save not spend, 100% of Brits need to be putting money aside each month. Not saving anything means it is harder to get onto the property ladder and it means that if something happens, there is no financial safety net to help you. For those with families it is particularly risky because all families need some financial back-up.

These non-savers need an offset mortgage. With an offset, the more you save alongside the loan, the cheaper the loan is to manage each month, so you save even more money. And that money you saved into the offset is available at any time, so it is still there for when you need it most.

Saving money rarely makes you money in these days of low interest rates. But it does with an offset loan. So start making your money work for you for once and talk to an offset mortgage adviser about taking out a home loan that will help you save.

SOURCE: Nationwide, 08/02/10

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

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Offset mortgages will benefit from a renewed interest in saving as the amount hoarded by UK savers more than doubled over the last 12 months.
 
New research from Birmingham Midshires has revealed Brits increased their savings pots and reduced their raiding in 2009 – and now, on a quarterly basis, they are saving 136% more than compared to this time last year. In the three months to January 2010, Britons saved an average of £776, compared with £329 during the three months to January 2009.

If you have an offset mortgage, investing as much as £776 over three months would significantly reduce your mortgage outgoings. So this new savings attitude can easy translate to profits if used alongside a good offset mortgage.

The research also found that although two in five British adults admit to raiding their savings during the same period, the average raiding amount has reduced to £1,724 from an all time high in July 2009 of £2,191. Almost a quarter of respondents raided their savings to pay for emergency home or car repairs whilst only a sixth used their savings to pay for a holiday.

So as well as saving more, people are raiding savings less. This trend also translates into offset profits – the less you take out of your offset, the less you have to pay at the end of the month and the shorter your mortgage term.

John Bianco, head of Birmingham Midshires savings products says: ‘It is encouraging to see that people are taking their savings seriously, putting away more and raiding less. In the current economic climate people have revisited their savings habits with a marked increase in people saving for a rainy day.”
 
SOURCE: BM, 27/01/10

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

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The Government has launched a scheme to help people with lower incomes start saving.

The Gateway to Greater Savings will help those on lower incomes to save by topping up every pound saved with a Government contribution. It aims to kick-start a saving habit and to get more money into the financial industry.

Angela Knight chief executive of the British Bankers Association says: “It has always been a frustration that the very people who would benefit most from regular saving are those least able to do so. When every penny has to be used to maintain a household, there is no opportunity to save.

“Britain’s banks are committed to helping this vital initiative to work, and look forward to contributing to its progress through Parliament to bring about an effective and simple solution.”

This is a great way to get people making the most out of their money, but there is already a great way for people to save and save – in offset.

Offset mortgages do not need Government aid – the vehicle reduces the rate of the mortgage it is attached to itself. So every pound saved lowers the mortgage rate just a little, which lowers monthly repayments.

If you think lower mortgage repayments will do more for you than Government contributions, talk to your adviser today.

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

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The UK’s previously burgeoning saving pile has begun to diminish as more Brits face up to their huge debt problems.

According to unbiased.co.uk, savings levels fall by over £19bn over the last quarter as Britons pay off a net £23bn of debt.

It says for the first time in eight-year study the nation’s focus shifts towards paying off debt rather than taking out new debt – for every pound saved in the last quarter, the British public also paid off £1.24 of their debt.

New figures from unbiased show that the credit crunch is finally hitting home and worried consumers are taking drastic actions to reduce their debt mountain.

David Elms, chief executive of unbiased, says: “2008 has been a turbulent year in terms of finances and these figures are unprecedented. Britons appear to have taken drastic actions in an attempt to reduce their debt levels. For the first time in our research the nation has actually focused on paying off debt rather than accumulating even more.

“But like everything, this trend has left its mark on consumer finances. With such a focus on paying off debt, the UK savings levels felt the repercussions and dropped to an all time low.”

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

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Offset remortgages are not simply a matter of signing on the dotted line again. A mortgage needs to be pored over and considered carefully, even if it is a remortgage there is much to consider. But what is important when it comes to offset remortgages? You may have enjoyed huge savings over the course of your last deal, but what is going to make that continue and even improve? And could you be making more? Where are you missing out? It can be a simple and painless process, but offset remortgages must not be taken lightly in the first place.

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2008 has been a tough year for mortgage holders. Rates are on the rise and more people are coming to the end of their cheap, easy two-year fixed rate products. So there are going to be a few rate shocks: many homeowners could see their mortgages rising by hundreds of pounds a month. That’s why flexible remortgages are so important for homeowners in 2008. Flexible remortgages can give mortgage holders the chance to get used to the new way of things and allow them to adjust to a radical new mortgage world. So if you are coming to the end of your mortgage, maybe you need a mortgage that can work round your changing situation.

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Many mortgages may seem like they are a financial coffin – unrelenting payments again and again every month, regardless of how your life is going. If you are in financial difficulty, or just want to take control of your finances it might seem like the mortgage chain around your neck is heavier than ever. But there is an option for those who want to take charge – flexible finance. It will let you take control of your money, your mortgage and your financial life. It might not save you much money, but it will save you a lot of stress and strain. So choose flexible finance on your home and become your own financial boss.

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After shopping for a mortgage for a short time you will have discovered that finding the best mortgage is a bit of a balancing act, you want a low rate but you also want flexibility and they never go together. A low rate mortgage will be loaded with fees, limitations and nasty clauses while a flexible mortgage that offers breaks and reduced fees will invariably have a much higher rate. So can you have both? Where can you go to find low rate flexible mortgages, deals that will work with all the changes in your life but will not break the bank? Or is this just too much to ask? Are low rate flexible mortgages just a mortgage white whale?

Find out more about Low Rate Flexible Mortgages

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Flexible discount mortgages can be a godsend, a mortgage that allows you to call the shots whether that means overpaying, underpaying or even not paying at all for a limited period. Its the perfect product for those whose income is up and down, month by month. Maybe you are self employed, maybe you rely on commission or bonuses or maybe you have ad hoc casual work. But what do you need to make sure your flexible discount mortgages work? What will be an asset and what will help you get by day to day? Where do you exactly need the flexibility?

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