Offset Advice - Mortgage Neutral

Hey good MFW folks - I have admittedly not been a regular on these forums but have been still regularly putting into my offset savings when circumstances permit.  Here is the up to date situation:

Offset product with Scottish Widows fixed at 2.39% until February 2025 - one of my better decisions was to lock in a 5 year rate.
Mortgage debit balance roughly 152K
Mortgage offset savings roughly 123K

Therefore I am paying interest on approx 29K at the moment as the rest is offset.  My question is around when the offset savings matches the debit balance effectively being mortgage "neutral".  I intend to keep the product but what happens at this stage?  Do I just keep paying my monthly mortgage payment at which point the amount in savings is more than the debit balance or what exactly should I do?  This is one part that kinda confuses me.
Outstanding mortgage Dec 2016 £214,500
Current mortgage outstanding May 2017 £211,244 June 2017 £210,446
Offset savings June 2017 £57,354 Balance outstanding May 2017 £154,490 June 2017 £153,091


  • Hi Freddy this happened to us recently. We've carried on paying the monthly mortgage payment, and I've been logging into Scottish Widows each month and setting up payments for the same amount as the mortgage payment to be withdrawn from the Scottish Widows offset to our nominated account. This way the outstanding balance matches the savings in the offset.
Meet your Ambassadors


  • All Categories
  • 343K Banking & Borrowing
  • 250K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.1K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards