Case Study – How my client is paying ZERO interest on his mortgage
‘Ashleigh sorted me out an offset mortgage on my home last year, I was thinking about paying off my mortgage with rates going up so much however I still wanted instant access to my savings if I needed it for other things. Ashleigh suggested an offset mortgage, I had never heard of this before so I was sceptical, however when everything was explained it did make sense for me. The whole process was really simple and I have just received my yearly mortgage statement and have paid NO interest. I am currently overpaying what I would have been paying in interest and it’s going to knock years off my mortgage. I am over the moon and can’t thank Ashleigh enough’
Review from March 2024
This particular client had enough money in his savings to clear his mortgage if he wanted to however was nervous about doing this incase he needed the money in the future however even if you do not have enough money to clear your mortgage in full or even if you just have a small amount of savings and are adding to it regularly then an offset mortgage could still allow you to pay much less interest on your mortgage or reduce the term.
Here’s how it works..
After speaking to an adviser and looking at how much savings you have, how much you are adding regularly and the interest rate on your savings we would then calculate how much this would save you in interest/how much it could shorten the mortgage compared to a traditional fixed rate mortgage.
For example if your mortgage balance is 100k and you have 30k in savings then you would only pay interest on the 70k
The more savings you add to the pot over time the less interest you pay.
You can choose whether this will either bring down your mortgage payment or you can overpay the mortgage to make your mortgage term shorter.
If this would work for you and you decided to go ahead the application process is just the same as any normal mortgage.
Once approved and started, you would then be sent instructions on setting up the new savings account linked to your mortgage.
You would transfer your savings into this account and set up any standing orders to add to the savings account.
Once your savings is added then the interest would be calculated the following month either bringing down the payment or keeping it the same to overpay the mortgage and shortening the term.
The savings account linked to the mortgage would not earn any interest & you may see an increase in the mortgage payments if you made any withdrawals.
The LTV ratio for offset mortgages is generally lower & rates higher than for conventional mortgages.
There may be a fee payable to arrange your mortgage and typically this will be £395.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE