What happens to my offset savings if my bank goes bust?

2401clare

I have an offset mortgage, and over 50K in savings offset against the loan. What happens if my mortgage provider goes bust? They assure me that they will deduct ALL my savings from my outstanding mortgage balance, so that I am left owing them the difference between my mortgage and my savings, but my gut feeling is that they will not be so generous, and that I will lose any savings in excess of the governments 50K guarantee, and be left with a whopping mortgage.

Who is right?

Comyface

Ooh, good question. I think they're right, though.

2401clare

Thanks for that. Bit worried by the word "may" though! Would definitely prefer it to say "would".

dimbo61

The government labour or tory cannot allow a bank to go bust in this counrty ( full stop)
But you could pay off say £100,000 off the mortgage now and still have £50K in the offset if needed

Thrugelmir

If you are concerned why not reduce the offset to £49,999 and pay down the mortgage with the excess.