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Go to calculatorAn offset mortgage can be a powerful tool to reduce your interest payments and pay off your home loan faster. Our offset mortgage calculator helps you understand the potential benefits of this unique mortgage structure. Let’s explore how it works and how you can use it to your advantage.
An offset mortgage links your savings account to your mortgage. The balance in your savings account is used to “offset” the amount you owe on your mortgage, reducing the interest you pay. For example, if you have a £200,000 mortgage and £50,000 in your offset account, you’ll only pay interest on £150,000.
The calculator will then show you:
The calculator uses the following formula to determine your savings:
Interest Saved = (Mortgage Balance - Offset Balance) * Interest Rate
It then computes the cumulative effect over the loan term, accounting for regular deposits to your offset account.
To get the most out of your offset mortgage:
Feature | Offset Mortgage | Traditional Mortgage |
---|---|---|
Interest Calculation | On reduced balance | On full loan amount |
Access to Savings | Maintained | Separate accounts |
Flexibility | High | Lower |
Potential Savings | Higher | Lower |
Ready to see how much you could save with an offset mortgage? Use our calculator now to get a clear picture of your potential savings and make an informed decision about your home loan strategy. Don’t leave money on the table – optimize your mortgage today!
No, your savings remain separate and accessible, they're just used to calculate interest.
It's most beneficial for those with significant savings or irregular income patterns.
Yes, most offset mortgages allow overpayments, potentially reducing your term further.
Your interest savings will reduce, but you maintain the flexibility to access your funds.
They can have slightly higher interest rates, but the potential savings often outweigh this.
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