With offset mortgages you not only gain long term advantage by offsetting savings, ISAs and current accounts against the mortgage, you also get a flexible tax efficient investment vehicle.

For example, consider a client has £ 25,000 that they need to invest. Offset that against a 25 year 95% offset tracker mortgage of
£200,000, and they’ll pay around £58,000 less in interest charges during the term of the mortgage and pay the mortgage off nearly four years early.

What’s more – when the mortgage is paid off they’ll still have that
£25,000 in savings.

And by choosing to offset the savings to reduce the interest paid on the mortgage the client doesn’t earn interest on the savings. This means that they don’t have to pay tax on their savings whilst offsetting. For a higher rate tax payer that’s very good news indeed. Over 25 years, that’s a pretty significant sum they’ll no longer be giving to the taxman.

The flexibility of offset means that the client can access their savings at any point so if personal circumstances change, funds are not tied up and out of reach. It also means that your client can save a bit extra whenever they can or put monies aside for a tax bill or a new car, thus increasing the mortgage savings even further.

If you would like independent advice on offset mortgages, or mortgages in general, please contact either John Earnshaw or Sarah Tomlinson, both independent mortgage advisers, of John Earnshaw Independent Financial Advisers Ltd, on 01253 890514 or 07939 120691. Alternatively John can be contacted via email on enquiries@johnearnshaw.co.uk or Sarah can be contacted via email on sarahtomlinson@johnearnshaw.co.uk.