Property Investment Guide – Benefits of offset mortgages

Offset mortgages are all the rage at the moment . . .

They have many benefits but don’t necessarily have the best rate.

However, the value of an offset mortgage is not in the rate, but in the benefits.

An offset mortgage is when the lender sets a credit limit at the outset and allows the borrower to withdraw up to this limit. It’s based on the value of the property, is fully flexible and allows a borrower to secure a drawdown facility and keep balances (such as mortgage debt, savings account and current account) in separate accounts.

What are the benefits of offset mortgages?

    • Clients can draw down funds within their agreed limit whenever they wish; e.g. for the deposits needed for a buy-to-let investment! This flexibility means that clients can react quickly to purchase opportunities!
    • Money in savings or current accounts is set against (or offset against; hence the name ‘offset mortgage’) the mortgage balance and interest is only charged on the amounts withdrawn.
    • Buy-to-let property investors can use their rental income to help pay off their residential mortgage just by putting back the rent into the offset account when collected. It all helps to reduce the amounts needed to service the offset mortgage and reduce the period of the mortgage. Excellent for the self-employed because the pot of money can be useful for cash flow but they need to be incredibly disciplined.Please call me if you want to discuss the benefits of offset mortgages.

Nick Rossington

About the Author

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Gladfish. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids.