| With offset mortgage the more you have in your | | | | repay the amount you are not at the risk of losing your |
| savings account, the less interest you pay on them, | | | | home. But be mindful of the fact that consolidating your |
| which helps you to repay them faster and more | | | | debts into your offset will make the short-term debt |
| cheaply in the long run. Also the rate of interest on | | | | into long term debt. Consolidated debts should be paid |
| your credit is reduced by the funds in both your | | | | off as quickly as possible otherwise they will cost you |
| savings accounts and your current accounts. Interest | | | | more in the long run. |
| on your savings or current account will be offset; as | | | | What's more you would repay the mortgage five |
| you don't get the interest on your savings instead you | | | | years and eight months early. That's because the |
| pay less as interest on the credit borrowed. You have | | | | monthly repayments are based on the full debt before |
| a savings account with the same lender from whom | | | | offsetting is taken into account so borrowers are |
| you borrow offset mortgages. | | | | effectively overpaying their debt each month. Thus |
| This kind of credit is a smart option out to all those | | | | you can pay less and save more with these kinds of |
| who are paying more tax on the interest on their | | | | mortgages! |
| savings account. If you have not received interest you | | | | On the other hand, flexible credit allows you to take |
| can't be charged tax on the interest. Keep heavy | | | | control over your finances. If you are a homebuyer, |
| taxes away. This means that offset credits are | | | | then you have a radical option for these known as |
| especially attractive for higher rate taxpayers who | | | | flexible mortgage. Earlier, with non-flexible ones if you |
| would otherwise pay-away 40% of the interest they | | | | had additional money and wanted to use it to pay off |
| receive in tax. | | | | some them, most lenders simply would not allow you |
| At the same time all your other debts, such as your | | | | to do so. Others would let you pay the money in but |
| credit cards or your personal loans can also be repaid | | | | levy a charge for the privilege. Some would accept |
| at the rate by consolidating it with offset credit, which | | | | the money, but leave to the end of the year before |
| is likely to be a lot lower than what you would have | | | | crediting it to your mortgage account, this way you |
| otherwise paid. A further advantage is that the credit | | | | would still be paying interest on money that you did not |
| cards and loans remain unsecured borrowings even | | | | really owe anymore. |
| though they are paid off at the rate, even if you can't | | | | |