Offset Mortgage Compared To Other Investments

Offset Mortgage Compared To Other Investments - What's Best?

The most obvious thing to do when looking at offset deals is to look at an offset mortgage compared to other investments. Because unlike other home loans, an offset mortgage is an investment - you put money into the mortgage each month in the hope that you will see a return on your investment. So what's best? It depends what you want out of an investment, how long you want to wait to see a return and how much you are willing to risk. So here is a quick comparison: looking at an offset mortgage compared to other investments such as property, savings accounts and investment funds. Offset is not right for everyone and will not deliver the returns that everyone is looking for, but for some UK homeowners, offset will be perfect.

An offset mortgage compared to a savings account

The most obvious comparison to an offset mortgage is a simple savings account in the form of a bond or an instant access account. In the past, when the base rate was high, this was a genuine competitor to offset because rates were high and competition between providers was fierce. Now, in this low rate environment, an offset mortgage compared to a saving account is no contest. You will be able to get better returns, at higher rates, every month with an offset. You can also use an offset much like a savings account, taking money out or putting money in as and when. In this case, the advantages of offset are clear.

An offset mortgage compared to property investment

Instead of offsetting your money alongside your mortgage, you could put the money straight into bricks and mortar through buy-to-let or simply putting a lump sum into your home. This is great in some cases, and a mortgage adviser will be able to tell you if you should invest in your home or in another property. But the benefits of an offset mortgage compared to property investment are that offset amounts can be accessed at any time, when you need it most. If you invest in property, while the returns can be considerable, the money is locked in an investment that may or may not be marketable in the future.

An offset mortgage compared to fund investment

If you talk to a financial adviser they may encourage you to invest your money in a fund of some sort, like a structured product or an ISA. This is fine. Many people have many sensible investments in funds all over the world. But this isn't for everyone - fund investment can be complex, can be confusing and can be very risky. An offset mortgage compared to a more complicated investment is a question of risk: if you want to put your money into an investment that will not lose a lot of money and will guarantee modest returns, offset is the answer. If you are looking for bigger returns and are ready for bigger risks, offset might not be the answer.

There are many ways to keep your money safe and make it work hard for you just by seeing an offset mortgage compared to other options. Some are riskier and some are long-term plans and some offer instant rewards. Offset ticks all these boxes - it allows you to invest in property, invest in something that offers lucrative returns and something that will do it month after month. If you take an offset mortgage compared to other savings vehicles you will find it comes out on top, every time.

Can't find what you're looking for? Search here:

Offset Mortgage Centre

RSS Feed