An offset mortgage allows you to link your savings account and your mortgage, the term “offset” meaning payments are deducted from your mortgage balance while no interest is earned on the savings account.

Key Mortgages can guide you through the process that an offset mortgage uses so you can decide if it is the right choice for you and your property goals.

What are the benefits of an offset mortgage?

Over time, an offset mortgage can lower your monthly payments and even shorten your mortgage term. While a standard mortgage bases your interest on the amount you owe, an offset mortgage and your savings account reduces the amount you need to pay interest on. The more you can put into your savings account, the more money you will save over a full mortgage term.

How do I know if an offset mortgage is right for me?

Like most mortgage alternatives, you should speak with an expert first to make sure you are getting the right deal that won’t set you back in the future. Not many lenders offer offset mortgages so you might find it easier to pay the money you would put into the linked account towards your mortgage balance directly.

Can I access the money in my savings account with an offset mortgage?

Like other transaction accounts, you will be able to withdraw money from your offset account. Consider if you need to withdraw this money first as it will affect your overall repayments and mortgage term. Expect lower interest on your home loan the longer you hold money in the offset account.

Questions & Answers

How can I access an offset mortgage calculator?

There are many mortgage calculator website you can use, these are based on assumptions and should only be used as an indication.

How is this different to overpaying?

An offset mortgage links your mortgage debt with a savings account, based around interest. Overpaying involves paying off your mortgage debt in a short period of time, reducing interest rates over time. Although a good option overall, lenders will not usually recommend overpaying to you.

What are some alternatives to an offset mortgage?

Savings accounts are an alternative but usually come with fairly poor interest rates. Shortening your mortgage term could also be another option.