Getting A Poor Return On Your Savings? Consider An Offset Mortgage
Released
on: August 20, 2009, 7:28 am
Author: London &
Country Mortgages
Industry: Financial
With
the Bank of England Rate remaining at an all-time low of 0.5%
in August, now could be a good time for many borrowers to consider
an offset mortgage.
An
offset mortgage works by using savings you have to reduce the
amount you owe on your
mortgage and therefore the amount of mortgage interest you
pay. For example, if you have an outstanding mortgage of £120,000
and savings of £20,000, you would only pay interest on a
mortgage of £100,000. You don’t receive interest on
your savings, but that also means that you don’t pay tax
on that interest.
This tax benefit, added to the fact that mortgage
rates are typically higher than savings rates, means that
you could save thousands of pounds in interest with an offset
mortgage. Taking a mortgage rate of 3.99%, a basic rate taxpayer
would need to earn at least 4.99% from a savings account to get
the equivalent benefit. A higher rate taxpayer would need to earn
6.65%.
You could also cut years off your mortgage term by using the saving
to make regular overpayments.
Richard Morea, Technical Manager at L&C said, “If you
are frustrated with the low interest rates you are earning on
your savings in the current market, then an offset mortgage is
worth considering. They are not suitable for everyone, but if
you have a decent amount of savings, offsetting them against your
mortgage could save you thousands of pounds in interest.”
-Ends-
Notes to Editor:
London & Country (L&C) is the UK’s leading no-fee
mortgage broker. Based in Bath, it provides whole of market advice
via telephone and post to clients nationwide. As well as residential
mortgages, it also specialises in the Buy-to-Let and adverse-credit
sectors.
L&C
is a Climate Neutral company and for the last seven years has
invested in climate friendly projects and tree-planting to help
offset its emissions and those of its customers. For more information,
go to www.lcplc.co.uk/green.
L&C
has won numerous awards including:
Best Mortgage IFA/Adviser of the
Year – Money Marketing, 2004, 2005, 2006 and 2008
Best Technology Adviser – Money Marketing 2007
Best Mortgage Broker outside London – Mortgage Strategy,
2004 and 2005
Best National Broker – Mortgage Introducer 2005, 2006 and
2007
Best Overall Broker – Mortgage Introducer 2005
Overall broker of the year – Pink Home Loans, 2006 and 2007
Top 100 company in the Sunday Times Fast Track 100 for 2004 and
2005
Business of the Year – The Bath Business Awards 2005
Growth Strategy of the Year – National Business Awards (Wales
and West) 2008
Business Leader (Broker) – British Mortgage Awards - 2008
Online Mortgage IFA of the Year – Financial Adviser - 2008
Press Contacts:
Richard Morea, Technical Manager
Office: 01225 341312
Mobile: 07970 885168
David Hollingworth, Head of Communications
Office: 01225 341211
Mobile: 07710 634044
www.lcplc.co.uk
Contact Details: 50 - 54 Putney High Street
Putney
London
sw15 1sq
2012
