Finding The Best Offset Mortgage Deal For You

Finding the​ Best Offset Mortgage Deal For You
Finding the​ best offset mortgage deal can be challenging .​
There is​ a​ huge amount of​ information on​ the​ internet and on​ the​ high street about offset mortgages,​ but instead of​ giving you​ clarity,​ it​ can leave you​ overwhelmed and confused as​ to​ which is​ the​ best offset mortgage deal on​ the​ market.
What is​ an​ offset mortgage?
Offset mortgages link the​ balances in​ a​ borrower's mortgage account and/or savings account .​
Interest earnt from the​ savings and/or current accounts is​ used against the​ mortgage debt and in​ theory; the​ mortgage can be paid off quicker .​
An offset mortgage is​ also flexible and allows overpayments,​ underpayments,​ and sometimes payment holidays.
The concept of​ an​ offset mortgage is​ very different from a​ standard type mortgage and you​ can’t just compare interest rates to​ find the​ best offset mortgage deal .​
Offset mortgages come in​ a​ variety of​ shapes and sizes that can suit your particular needs and circumstances .​
Therefore,​ you​ need to​ look at​ an​ offset mortgage deal as​ a​ whole before you​ decide which is​ the​ best offset mortgage deal for you​ .​
The Council of​ Mortgage Lenders (CML) said in​ 2018,​ approximately 170,​000 offset mortgages were sold,​ which was worth £23.9 billion.
Many households looking for a​ new mortgage deal would be better off with an​ offset mortgage,​ yet they account for a​ minority of​ the​ market – about 7% .​
Most householders tend to​ settle with what they know,​ i.e .​
a​ traditional type of​ mortgage,​ because many people find it​ hard to​ understand the​ potential benefits that an​ offset mortgage could offer,​ such as​ yearly savings,​ flexibility,​ and tax benefits.
An independent mortgage broker
To help you​ choose the​ best offset mortgage deal for you,​ it​ is​ advisable to​ seek assistance from trained personnel who give impartial advice,​ such as​ an​ independent mortgage broker .​
Like any financial service in​ the​ UK,​ an​ independent body called the​ Financial Services Association (FSA) regulates them .​
The FSA applies the​ Principles of​ Business to​ companies,​ for example,​ Principle 6 states all customers must be treated fairly,​ and Principle 7 states information provided must be clear,​ fair and not be misleading .​
Therefore,​ you​ can rely on​ independent mortgage advisors to​ help you​ find the​ best offset mortgage deal.
Research by the​ CML showed that the​ majority of​ offset mortgages are sold through intermediaries .​
By the​ end of​ last year,​ intermediaries accounted for 60% of​ all offset mortgages sold,​ compared to​ 45% in​ April 2018.
Different types of​ offset mortgages
Since the​ first offset mortgage was introduced into the​ UK in​ 1997,​ the​ number of​ offset mortgage lenders has increased five-fold over the​ last decade,​ and the​ number and range of​ offset mortgages has increased to​ about 250 offset products .​
For example,​ the​ buy-to-let offset mortgage lets borrowers pay in​ their rental income into their savings/current accounts to​ offset the​ outstanding mortgage balance .​
There are offset mortgages suitable for people with irregular income,​ such as​ the​ self-employed,​ commission based employees,​ and first-time buyers.
Offset products are often associated with people moving home and remortgagers,​ who are slightly older and higher income individuals .​
However,​ offset mortgages are now suitable for some younger first-time homebuyers .​
These include the​ ‘family offset’ that allows the​ borrower’s family and/or friends to​ use their saving balances to​ offset the​ borrower’s mortgage debts.
In conclusion
Offset mortgages are growing in​ popularity and they are being described as​ a​ ‘lifestyle tool’ that can help mortgage borrowers maintain control of​ their finances .​
An independent mortgage broker can provide invaluable advice in​ helping you​ choose the​ best offset mortgage deal for you.

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