Offset mortgage

An offset mortgage links a mortgage with a savings account – as long as they are both with the same lender. It means you pay less interest on your mortgage. The savings aren’t used to settle the mortgage balance, but the lender takes them into account when calculating the interest you’ll pay. For example, if you have a £200,000 mortgage and £20,000 of savings, you will only pay interest on £180,000 of the mortgage.