Mortgage Shrinker

megakingbob

Hi MoneySavers,

I have been looking online for ways pay off my mortgage faster as it is effectively the largest loan I will ever have, one thing I came across is a mortgage shrinker, you use this company for your current and savings accounts and it helps offset your mortgage interest. The calculator says that at my current salary and mortgage I could cut down my mortgage term form 35yrs to 15yrs and 11 months. My plan was always to shorten my mortage term after getting on the property ladder as 35yrs means more interest.

Does anyone have any experiences with this kind of deal? Is it too good to be true?

Any helpful comments appreciated :-)

dunstonh

Offset mortgages have been round for many years. I havent heard them referred to as mortgage shrinkers before. Thats probably a marketing name for one company.

They can have advantages for people with savings which fluctuate a lot, such as self employed who save for their annual tax bill. However, they are less beneficial for long term savers who could probably gain more by just paying off the mortgage or investing/saving the money somewhere with a better return than a discounted rate mortgage could offer.

megakingbob

Thanks very much for the reply, I will think seriously on the matter. :-)

Joe_Bloggs

@dunstonh
The One Account (RBS) have a shrinker demonstration where they they illustrate the benefits of their products versus a range of inferior products. It is not surprising who usually wins in the end.
J_B.