Which lenders offer offset mortgages?

SouthLondonUser

Which lenders offer offset mortgages? We'd probably prefer tracker over fixed but we haven't made up our mind yet on that.

I can't seem to find offset mortgages with the typical online mortgage comparison tools.

The banks I know which do are:

• First Direct: interest-only offset, but very expensive, especially the tracker - a tracker at 5.29% makes no sense at all
• Barclays: offset trackers only
• Yorkshire Building Society: fixed offsets only, no trackers
• Scottish Widows: fixed offsets only

Are there any others?

I couldn't find anything for HSBC (other than through First Direct), Santander, Halifax, Lloyds.

We are interested in offset mortgages because we have a decent amount of savings but, for reasons I won't get into, at least one of our jobs may be somewhat unsafe. So we like the idea that the savings reduce the interest we pay but remain accessible should we need them for emergencies, like a redundancy,

Till a couple of years ago, offsets weren't really worth it because they were much more expensive than normal mortgages, and it was not impossible to invest at better returns than the rate of your mortgage. Now we are obviously in a very different world.

Of course I fully understand that I need to run some numbers once I have exact quotes, and that an offset will not necessarily be the best solution.

I also understand perfectly well that a tracker exposes us to the risk of rates rising even more.

housebuyer143

I believe Godiva does them. They still do come with a higher fee than standard and in Barclays case, higher fees and I thought about this a lot recently and decided to just stick my money in high interest savings accounts and stick to a normal tracker.
The rates I am getting are the same or better than the tracker I was offered but I am not paying the fee. 

SouthLondonUser

I thought Godiva was only a brand of chocolates

I had never heard of Godiva Mortgages; looked them up now, and couldn't find anything on offset mortgages.

Barclays has a 2-year tracker at 3.47% plus £1749 fees.

The cheapest 2-year trackers are 2.95% with lower fees eg £1025 with Natwest)

The best easy access saving accounts pay ca 2.5% before tax and the best easy access cash isas 2.20%

Obviously I'd need to run all the numbers in detail but, at a high level, I'm probably better off with a cheaper Natwest tracker and investing the savings elsewhere.

If I could find a cheaper offset than Barclays', it might be different.

housebuyer143

SouthLondonUser said:

I thought Godiva was only a brand of chocolates

I had never heard of Godiva Mortgages; looked them up now, and couldn't find anything on offset mortgages.

Barclays has a 2-year tracker at 3.47% plus £1749 fees.

The cheapest 2-year trackers are 2.95% with lower fees eg £1025 with Natwest)

The best easy access saving accounts pay ca 2.5% before tax and the best easy access cash isas 2.20%

Obviously I'd need to run all the numbers in detail but, at a high level, I'm probably better off with a cheaper Natwest tracker and investing the savings elsewhere.

If I could find a cheaper offset than Barclays', it might be different.

I meant the Coventry 😁 Godiva is their BTL arm. 
I came to the same conclusion when I was doing it that Barclays was the best also. 

I have got an easy access at 2.75% then some fixed accounts over 4%. Potentially we might have been a little better off on the offset but not enough to compensate for the inconvenience of moving all my accounts to Barclays 🤣 then I would be tempted to never spend my money because it's offsetting the mortgage ha ha. I don't need more reasons to agonise over every spend lol.

Btw, if you do it this way check out the savings forum page on here, there is a constant update on best accounts and some are now paying 2.8% easy access. 

silvercar

I’ve had a Coventry lifetime offset tracker for the last 15+ years. The offset savings sits in a savings account, so there is no need to move your general banking. You can choose to have your mortgage payments reduced by the amount in your offset savings account or to pay what would be the full amount and the excess payment reduces your mortgage outstanding capital.

johnbhoy70

Some similarities to both of you above. We've had an interest only offset with FD for over 10 years now. Managed to bag a 1.99% fixed rate for 2 years at the start of the year. We've been fully offset for over a year now  but up until recently never looked at savings rates either with FD or elsewhere. From briefly looking at rates FD appear pretty poor for savings however have opened a Regular Saver at 3.6% and a Bonus Savings (their version of easy access i think) at 1.65% last week.

Also opened the Santander easy access 2.75% last week but i've done nothing with it yet and tbh i'm trying to keep most stuff under the same umbrella rather than open new accounts. Nearly forgot also opened a Regular Saver with RBS/Natwest last week too but that's only because we had an account with them anyway and it was literally a couple of minutes in their app to open. 

We're very roughly just over 5 figures over fully offset but in hindsight, to me anyway, it just isn't worth the hassle opening all these acounts at different places unless you've pretty serious cash.

ps- incidentally my own work situation isn't clever, like a lot of people i'm sure, and will possibly be chucking it in NY if things don't improve. It's a pretty fluid situation at the moment.

johnbhoy70

If your savings outweigh your mortgage or make your mortgage negligible they can be a very handy and flexible option to have emergency funds to hand instantly. On the whole we've not really needed to but who knows what the future holds?? We've still got a school age wee one at 11.

However, what i would say is that i wouldn't be entertaining an Offset if i knew i was going to be paying the interest over a middle to longer term as they tend to carry more  expensive interest rates. That's just my opinion and experience after having one for the last circa 12 years.

SouthLondonUser

@johnbhoy10 Yes, agreed. This seems to be our impression so far: that the higher interest rate negates the benefit of offsetting, at least with the lenders I have found so far.

K_S

@SouthLondonUser As of today and excluding direct-only lenders and existing-customer products - it's Barclays, Accord, Coventry, Scottish Widows and a couple of small building societies (offering discount offsets). Some of the product availability differs based on whether it's a purchase or a remo.

Coventry is reducing rates on some of its offset products from Wednesday.

Can't vouch for its accuracy or completeness but the Moneyfacts comparison let's you filter for offsets.
https://moneyfacts.co.uk/mortgages/

SouthLondonUser said:

Which lenders offer offset mortgages? We'd probably prefer tracker over fixed but we haven't made up our mind yet on that.

I can't seem to find offset mortgages with the typical online mortgage comparison tools.

The banks I know which do are:

• First Direct: interest-only offset, but very expensive, especially the tracker - a tracker at 5.29% makes no sense at all
• Barclays: offset trackers only
• Yorkshire Building Society: fixed offsets only, no trackers
• Scottish Widows: fixed offsets only

Are there any others?

I couldn't find anything for HSBC (other than through First Direct), Santander, Halifax, Lloyds.

We are interested in offset mortgages because we have a decent amount of savings but, for reasons I won't get into, at least one of our jobs may be somewhat unsafe. So we like the idea that the savings reduce the interest we pay but remain accessible should we need them for emergencies, like a redundancy,

Till a couple of years ago, offsets weren't really worth it because they were much more expensive than normal mortgages, and it was not impossible to invest at better returns than the rate of your mortgage. Now we are obviously in a very different world.

Of course I fully understand that I need to run some numbers once I have exact quotes, and that an offset will not necessarily be the best solution.

I also understand perfectly well that a tracker exposes us to the risk of rates rising even more.

tetrarch

Barclays Offset process has one massive benefit. They will let you offset Cash ISA account(s).

This was a tremendous boon for me as when I retired I was able to take the TFLS from my pension and then reinvest the cash released in the same exact underlyings within an ISA wrapper. 

Regards

Tet

plunt

tetrarch said:

Barclays Offset process has one massive benefit. They will let you offset Cash ISA account(s).

This was a tremendous boon for me as when I retired I was able to take the TFLS from my pension and then reinvest the cash released in the same exact underlyings within an ISA wrapper. 

Regards

Tet

I know this is an old post but wanted to flag that with any offset you can achieve the save result by having a flexible isa, a week or so before the tax year get your money out of your offset, put into the flexible isa, after tax year withdraw it all and put back in your offset. At the end of the year do it again plus your new isa allowance and repeat. This allows you to keep your growing wrapper each year