|
|
Offset
Mortgages - US
With Interest
Rates Being So Low, Now Is The Time To Change to a
Offset Mortgage. Offset Mortgages
enable you to Reduce Your Mortgage at a Much Faster
Rate. Offset Mortgages offer great Financial
Flexibility.
Simply enter your zip code in
the box on the left for instant quotes.
What is an Offset
Mortgage?
By taking out an Offset
Mortgage, you can make the money in your current
or savings account work a little harder for you than
usual. The balance of the mortgage is basically
reduced by the amount of money in your savings or
current account. So, if your mortgage is £100,000
and you have £5,000 in savings, you mortgage balance
will be considered as £95,000 and you will only be
charged interest on that amount. As the interest on
savings is being offset, you are effectively paying
no tax on your savings interest. Offset Mortgages
are also known as Current Account Mortgages.
TIP:
By offsetting your mortgage balance against a
current or savings account, you could end up paying
less interest or paying your mortgage balance off
much quicker.
There are a number of companies who offer competitive
Offset Mortgages. Remember to Compare Offset
Mortgages before signing on the dotted line.
Use one of our free
Mortgage Calculators to compare Offset Mortgage
Rates.
Offset Mortgage
Disadvantages
- The main
disadvantage is the higher and generally
uncompetitive interest rate offered on these
kinds of plans
- As a rule of
thumb offset mortgages are around 1% higher than
other mortgage deals but this gap is slowly
eroding as competition increases
- Because of this
premium on the interest rate anyone considering
an offset mortgage should have large savings and
those with small savings should normally
consider other deals such as fixed-rate or
discounted mortgages
Is An Offset
Mortgage For You - A Simple Rule of Thumb
- If you have a
high income and/or large savings then you should
definitely consider an offset mortgage, if
you're not in at least the higher-rate tax band
then offset mortgages won't be competitive for
your financial situation
- Because
everyone's financial situation is different it's
hard to give exact figures as what
income/savings are needed but as a rule of thumb
if your savings are at least 20% of the total
mortgage loan then consider offset mortgages
- Of course, this
is where you'll have to get all your figures out
and run the numbers
- Also note that it
may actually make better financial sense to use
savings to reduce the mortgage amount in a one
off payment, especially as discounted mortgages
are cheaper than offset ones (be on the lookout
though for sneaky redemption penalties)
- But in this
situation the savings will be used up and you
won't be able to draw them down for whatever
reason
Find the
Best Financial Packages
At Sherlochs, we regularly update our pages
with the very latest financial offers. Find
the best mortgage rates, cheapest loans, best
insurance quotes and more.
Read the
Latest Financial News
We regularly update this site with the very latest
financial news. Read the Financial Articles,
and review the latest financial products.
Follow the links to the left to find information &
advice on the Financial Product or Service you are looking for.
|
|
