Offset

cloudy913

Hi , I have an offset mortgage . My offset savings account at present has enough in it to repay the mortgage .
My questions are should I clear the mortgage? and if the savings account balance is more than the mortgage am I still paying interest on the mortgage ?

ACG

You should not be paying interest on the mortgage if the savings equal or exceed the Mortgage. However you are unlikely to be gaining any interest if you have more in the savings than the blance of the Mortgage or if you are, it will be quite a low amount.

cloudy913

Thanks . The amount in the savings account is just more than the mortgage at present so not losing out on much interest . It would be nice to be mortgage free but am I better to keep the savings as an emergency fund since the interest rates on savings are so low at present ?

TrickyDicky101

Since you retain flexibility by keeping the offset I would do that - it isn't costing you anything. Any additional funds you might otherwise place in the offset account should be targeted elsewhere to maximise your economic return.