clearing offset mortgage?

getmore4less

Thrugelmir wrote: »

The offset account balance is netted against the mortgage balance in calculating the monthly interest charge. So no tax liability arises. All legal and above board.

that is the key point it not the same as

Are you sure that depositing money in the offset account reduces your monthly mortgage payment. With many offsets the interest earnt is credited to the mortgage account , not used to reduce the normal payment
and
Every month the interest earnt on the offset account balance reduces the mortgage balance.

Which is how you said it works.

I suspect all offsets work this way because they need to avoid any tax issues.

Although the net affect may be the same it is a very important difference.

Then a key differentiator in chosing an offset will be the rates and flexability of payment options.

Although I also see that the H&B also has restrictions on the savings accounts but no sign of any fees or interest loading for offsetting.

silvercar

Coventry give borrowers the option. Either you pay interest on the full amount borrowed with the interest that is calculated above the offset amount reducing your capital owed, or you pay interest on the difference ie net borrowed.

jaxster1

Many thanks for your replies, sorry for late reply have been offline for a few days.
Mortgage is with Coventry, can offset 100percent of debt. Think it makes sense to do that and set up direct debit from the offset to pay the monthly repayment if that works out.
Thanks again.