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New research from Birmingham Midshires has revealed Brits have almost doubled the amount they are saving on a quarterly basis compared to this time last year – but even more Brits could be doing this with the help of a good offset mortgage.

In the three months to April 2010, Britons saved an average of £1,031, compared with £554 this time last year and £776 during the three months to January 2010. And BM says only two in five British adults admit to raiding their savings during the same period – it says the average raiding amount has reduced to £1,499 from £1,724.

With an offset mortgage loan, the incentive to save rather than spend is huge – if you spend from your savings pots you have a bigger mortgage repayment rate, if you save more that rate goes down. It’s simple, but it’s a great way to help you save more each month.

John Bianco, senior manager at BM Savings says: “It is reassuring to see that people have increased the amount they save for the second quarter in a row, as good saving habits are important to ensure you can plan ahead financially.”

Talk to a mortgage broker about offset mortgages. They will help you search the whole UK offset mortgage market and will show you the loans that would benefit you and make sure you save more than you raid.

SOURCE: BM, 16/04/10

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

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It is not just those who are scrimping and saving who could benefit from an offset mortgage – it’s unique properties make them an excellent choice for the wealthy too.

Offset mortgages are a great way of making more from your savings. But they are also a great way of getting round the taxman – because the benefits of offset are not based on interest, you accrue no income tax on what you get out of the mortgage – so you make even more profit, tax-free.

This is why offset mortgages are most cost-effective for higher rate taxpayers – those in the highest tax bands are saving as much as 40% tax by switching over to an offset – they do not have to lose 40% of their savings’ profits because with offset it’s about how small you can make your mortgage repayments, not how much interest you can accrue.

Also, it is these higher earners who are most likely to have the biggest savings, so the benefits are even more pronounced – those who can invest as much as half or more of their property’s worth into an offset will see significant savings each month.

At the start of next month the Government will be increasing income tax to 50% for those earning more than £150,000. So for these highest earners, an offset mortgage can help them avoid even more tax than ever – more savings and less tax makes offset the perfect choice for the wealthiest of Brits.

But just because you are successful in your field and earn a good wage doesn’t mean you know the ins and the outs of the mortgage market. Even if you earn the sort of wages a top Premiership footballer might earn, you still need to talk to an offset mortgage adviser about taking one of these ingenious but complicated mortgages.

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

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People simply cannot make the money that they need by putting their nest eggs into a savings account in this low rate and high inflation environment.

Even though inflation recently fell to 3%, it is still high, and combined with a low interest rate it means savings accounts are just not good enough. But offset mortgages are still performing well – they are flexible loans so it is you, not the UK economy, that decides how much you can save with them each month.

According to moneysupermarket.com, basic rate tax payers with savings only will now need an account paying at least 3.76% to gain benefit in real terms from their cash, increasing to 5.01% for higher rate tax payers and 6.01% for those higher rate tax payers paying 50% tax from April 6.

If you take a look at the best buy table for savings accounts these rates are nigh on impossible to find. So people are simply not going to make any money from their savings by going down the traditional paths. Kevin Mountford, head of banking at moneysupermarket.com, says: “Despite a fall in inflation, savers are still hard pressed to generate any real returns. There is a danger that many will do nothing because of the belief that there is little point, but this is not the time to be apathetic.”

It certainly isn’t the time to be apathetic. People need to get proactive and find real ways to make their money work for them. One of them is an offset mortgage. Because the savings come through increasing your offset savings pot, it is down to you how much you reduce your outgoings by each month.

So take matters into your own hands and talk to an offset mortgage adviser about quitting the moribund savings market and opting for a financial product that is really helping people now.

SOURCE: Moneysupermarket.com, 23/03/10

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

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Rising inflation coupled with a historically low base rate of 0.5 per cent has left consumers with very few opportunities to gain any real return on their savings – but for those savers who also have a mortgage, now could prove the perfect time to consider switching to an offset mortgage deal as a way of providing an alternative to poor paying savings accounts.

According to Moneysupermarket.com, customers taking out a £100,000 offset loan at 3.49% and holding £30,000 in a linked savings account would only pay interest on the remaining £70,000, saving £11,648.51 over the lifespan of the mortgage, and would knock five years off the payment term also.

It says to be able to match this deal, savers would need to find a savings rate of at least 4.5% for basic rate taxpayers, rising to 6% for higher rates taxpayers. None of the 264 UK easy access savings accounts currently pays a high enough rate.

Hannah Mercedes-Skenfield, mortgage channel manager at moneysupermarket.com, says: “It is becoming almost impossible to find an account which offers a real return on your savings. As a result, the advantages of an offset mortgage are becoming more attractive to borrowers who also have a decent savings pot.

“At times like these, when interest earned on savings after tax is potentially lower than the interest consumers pay on their debt, offsetting can be a great option. There is an additional benefit for taxpayers, as you don’t earn interest on the savings, you won’t be taxed on them either. This is even more of a benefit to higher rate taxpayers.”

SOURCE: Moneysupermarket.com, 15/03/10

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

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Many savings rates have tumbled over the last few months as lenders try and offer cheaper mortgages – with an offset you can have the best of both worlds.

At the moment, in order to maintain their balance sheets, banks can either offer competitive mortgage or saving deals, not both. And according to Moneyfacts, since November 2009 mortgage rates have been reducing, but in order to fund these cuts savings rates have fallen too.

Michelle Slade at Moneyfacts says: “Providers have moved their focus to the more profitable mortgage market, with savings rates being reduced to fund mortgage cuts and those who really on their savings to supplement their income being hardest hit.
 
“It is already virtually impossible for savers to find an account paying a positive real return after tax and inflation and falling rates are only going to exacerbate the situation.”
 
With an offset mortgage you can have it all – you can save money each month and you can have a cheap mortgage rate. Because with offset you don’t need to worry about cheap savings rates, you save money by reducing your mortgage rate each month through increased savings.

So if you are sick of looking for the impossible combination of high savings rates and low mortgage rates, talk to an offset expert about taking out a loan that saves you money while also giving you a low rate of mortgage repayment, giving you everything that you need.

SOURCE: Moneyfacts, 09/03/10

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

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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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If you are finding it hard to save as much as you’d like you might want to consider taking out an offset loan to help you save more every month while at the same time reducing your mortgage.

It has been hard to save during this economic slump – we might be out of the recession, but according to National Savings & Investments, the British public is now setting aside just 6.25% of their wages – the lowest level since summer 2007. In pounds, average savings have fallen from £90.12 twelve months ago to £81.94.

Only 44% of people say they have been regularly saving any money over the last few months. Over the past five years, this figure has fluctuated between 47% and 55%, so this is one of the lowest ever recorded levels. Also, the amount of money ‘regular’ savers set aside each month has fallen below £200 for the first time in over a year to £195.08.

It’s hard to save when there is little chance of bonuses or raises. But with an offset as you save, you reduce your outgoings for the next month because your mortgage rate has been reduced. So with an offset you can be sure that you will be able to save even more next month even without the promise of more money from your job.

Tim Mack at NS&I says: “With the new financial year approaching, now is a good time for people to take a closer look at their finances and set themselves savings goals for the year ahead.”

SOURCE: NS&I, 03/03/10

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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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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New research by The Co-operative Bank Mortgages has revealed that almost two thirds of mortgage holders are aiming to be mortgage-free by the time they reach 50 years of age. 

This is a great goal, but one that is tough to make a reality. To do it you need a mortgage that encourages overpayment and actually gets cheaper the more you invest into it – you need an offset mortgage.

To be mortgage-free would be a wonderful thing – the bank found that over half of people would take more holidays, just under a third of people would turn their attention to saving more for retirement and a quarter of people would look to change their working lives by either finishing work or moving to part time hours.

And people are doing it already. Many have been making mortgage overpayments to reduce the term of the mortgage over the last year. Other people are looking to take advantage of the low interest rate environment, and some are looking to have more disposable income as a result of reductions in their mortgage rate. Ask your mortgage adviser about how well their offset mortgage clients are doing right now for an idea of the benefits overpayment can make to your life.

James Hillon, head of mortgages at The Co-operative Bank says: “The research clearly shows that many mortgage holders are looking to take advantage of the low interest rate environment by making overpayments.”

With an offset mortgage, because you can make overpayments and because you can reduce your rate by doing so, it pays to be in a low rate environment and it pays to overpay. It’s exponential as well, because the more you save the cheaper your mortgage rate and the more you have in your pocket at the end of the month, so you have the means to save even more the next month, and the next.

Talk to an offset mortgage adviser about a loan that will help you become mortgage-free. It might seem like a long way off when you are trying to manage a six-figure debt, but with hard work and good advice you can get rid of that responsibility and begin to spend your money on what you want.

SOURCE: Co-Operative Bank, 15/02/10

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