Logo
Global

Is Now the Time for Offset Mortgages?

21st August 2023
PARTNER

Chris Lloyd

contact
Is Now the Time for Offset Mortgages?
Chris Lloyd
PARTNER

Chris Lloyd

This client approached Enness to refinance their home, worried about the substantial increase in mortgage payments and unwilling to use their savings to cover them. They would have been able to afford their mortgage payments but would have had to reduce their lifestyle expenses significantly.

Although the client had no immediate plans for the funds, they did not want to use their savings. Enness explained that they could remortgage with a lender offering an offset mortgage and could then place up to the total borrowing amount into a savings (offset) account with the new lender. This would be used to offset the mortgage interest. They preferred to have a full interest-only mortgage for reduced monthly payments, as they planned to sell their home at the end of the term and downsize to a smaller property once their children had left. They would then use the equity from the sale proceeds to repay the outstanding mortgage at the end of the term.

Enness secured a 5-year fixed rate of just 5.91% on a mortgage of £1,000,000. The client then put their savings into the offset account and, as a result, now enjoys a reduced monthly payment! The mortgage term is 25 years, and the lender arrangement fee was just £999.

Where we have quoted rates and fees, the actual terms available will depend on your circumstances and are subject to lender variation at any time, without notice.