Offset

Offset deals are designed to help borrowers achieve one of two important goals: to either cut their monthly repayments or to reduce the term of their mortgages.

In both cases an offset deal automatically deducts the value of any money in a borrower’s linked savings and current accounts from their mortgage balance before working out how much interest they need to pay. If you have a mortgage of £180,000 and £15,000 in savings then you need only pay interest on £165,000, for example. This is what you do if your offsetting goal is simply to cut your monthly outgoings.