Independent Financial Life Planners Bishop's Stortford: What is an offset mortgage?

Thursday, 6 November 2014

What is an offset mortgage?

Enable’s IFAs who act as mortgage brokers in Bishop's Stortford can help you investigate it it is a smart and tax-efficient way to cut your mortgage costs. Only around ten per cent of borrowers currently take advantage of this type of home loan. It works by simply combining your savings and mortgage balances helping to save thousands of pounds in mortgage interest costs at the same time as reducing the term of your home loan when interest rates are low.

For higher rate-tax payers in particular the other key benefit, is that there’s no tax to pay on your savings interest and the equivalent return is the same as your mortgage rate. At the moment with interest rates on instant access and 1-year savings accounts stuck around the 2 per cent park, for many people even if they are not higher rate tax payers, there’s still more to be gained by offsetting your nest egg against your mortgage balance, which in many cases is being charged at upwards of 3.5 per cent.

Bishop’s Stortford mortgage brokers at Enable can see why many people do not necessarily take up the mortgage product as it is a more complex product than many other mortgage products and can be perceived as only suitable for those with large savings balances, but sometimes it pays to really nut out the sums. For example with some mortgage products , someone with savings of £5,000, offsetting this balance against a £100,000 mortgage at 4.00 per cent would save interest charges of £8,016 and take 1 year and 3 months off the term of a 25-year mortgage. Enables mortgage brokers in Bishop’s Stortford can help you work out the best mortgage product for you.

Your home could be at risk if you do not keep up repayments.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

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IFA Bishop's Stortford

At Enable Independent we know that our clients trust us and rely on our advice to help them to plan a better, more secure financial future. This is a responsibility that we take very seriously especially because we know that many clients have chosen us on the recommendation of friends and family. Each one of our advisers has deep expertise in their area of specialist knowledge and, as a team, we hold some of the highest qualifications available in the financial advice industry.

Our job satisfaction comes from using our skills to find workable, affordable and flexible solutions to meet our clients needs. Whether we are planning for known future funding requirements such as house purchase, school fees or income in retirement - or for the unforeseen such as job loss, long-term illness or early death, our independence from any product provider enables us to view the marketplace impartially. Our training permits us to look beyond a product's marketing hype and select on the basis of its fitness for purpose.