Offset Mortgage 'Could Be A Profitable Swap' For Homeowners

With many of us feeling the pinch moving house could be the last thing on your mind. However, there are still plenty of people out there looking to buy or sell a property. Of course, though, the time has to be right and in the current financial climate many are simply waiting to see what happens.

There are other options for investing your money according to a leading financial investment company. Swapping to an offset mortgage could be a profitable decision for homeowners, according to research.

Making this move could reduce the length of a £100,000 mortgage over 25 years by almost 36 months, the firm has calculated. This could then lead to a saving of £18,322 on the interest, according to a spokesman.

"If property is your preferred investment, it's worth existing homeowners investigating offset mortgages as a savings option while they wait for the right time to invest," he said. His company has asserted that mortgage levels could be affected by a house-buying "waiting game".

More than four million property owners are keeping an "eagle eye" on the property market and deciding not to move home until prices start to rise, they claim.

What is an Offset Mortgage?

An offset mortgage pulls all of your finances into a single account. So it runs your current account, mortgage, savings and personal loan accounts together. On a daily basis, it adds up all of your assets and your savings, plus the money in your current account, and offsets them against your debts (mortgage and loans).

Offset mortgages keep your money in virtual 'pots', so you can still see how much you effectively have in your separate accounts, but it gets your money working as hard as possible for you. The main drawback is that offset mortgages can be quite difficult to get your head around initially.

If you would like to know more about mortgages why not ask AnswerBank Business and Finance.