Offset Mortgages

 Example

For example if the customer has a mortgage of $130,000 and has $10,000 in a linked account and current account, by offsetting they will only be charged mortgage interest on the $120,000 difference. If they decide to overpay each month, they can do so without incurring early repayment charges, by making the contractual monthly payment.

The interest saved by subtracting the account balance from the mortgage balance will over time reduce the mortgage balance and therefore the term of the mortgage or your client can pay each month.

To save even more interest your client can also make overpayments on their mortgage at any time if it suits them.

In addition because the checking and savings account are not earning interest, tax will not be relevant on the savings, which can be particularly efficient for a higher-rate-payer.