Saving

Plenty of people are ready to accept that offsetting some of their savings can help them save big money on their mortgages. But experts don’t think enough people realise how important it can be to take the final step as well – linking your current account to your offset deal as well.

‘It’s probably because most of us don’t think we ever have much money in our current accounts,’ says Mark Parker, managing director of current account mortgage specialist Intelligent Finance. ‘But the reality is that even small balances can have big effects over the long term.’ That’s because offset mortgage lenders recalculate everything on a daily basis. And in the early days of the month, just after payday, the money that is in our current accounts will count for a great deal. We can spend all our money as usual, using all the normal direct debits, standing orders and cash withdrawals. But for every day we are in credit we get a little offsetting bonus. Again you can find out just how useful this bonus can be by playing with the offset calculators mentioned earlier.