The Mirror - Many don't know about this type of mortgage and it's good for self-employed

 

Offset mortgages mean that, instead of keeping your savings and your mortgage with completely different banks, you put them both under one roof. The bank subtracts your savings balance from your outstanding mortgage balance before calculating your monthly interest. You don't lose your savings, instead they sit in an accessible savings account, but they act as a financial shield against your mortgage debt.

Aaron Strutt, product director at London-based Trinity Financial, said many lenders didn't offer them. "Homeowners can potentially save thousands of pounds in interest payments with offset mortgages, but many lenders do not provide them. At the moment there are approximately five lenders offering offset mortgages. The most well-known banks and building societies that provide them include Accord Mortgages, Barclays and Coventry for Intermediaries.

"For wealthier clients looking for larger mortgage loans, Coutts also has some offset mortgages. Unfortunately, the biggest provider of offset mortgages, Scottish Widows Bank, announced in October 2023 that it would exit the new business mortgage market to focus on equity release loans.

"Family Building Society also pulled its offset mortgages. With so many homeowners making overpayments on their mortgage, offset mortgages should be more popular. They are great for the self-employed, higher earners and borrowers with variable incomes."

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