The Best Guide for the NN12 Area

Your guide to offset mortgages

Offset mortgages let you use savings to reduce interest

We often get asked about offset mortgages, especially from parents wanting to find ways that they can help get their sons and daughters onto the property ladder. I hope this week’s column helps you understand how they work and clears up any misunderstanding.

Basically an offset mortgage allows you use savings to reduce the amount of interest you pay on your mortgage. The only caveat is that whilst you will still be able to access the money in your savings account you won't earn any interest on it.

Instead, your mortgage is offset or 'reduced' by your savings, meaning you pay less interest on your mortgage balance helping you to pay off the loan much sooner.

Because mortgages charge higher interest rates than most savings accounts paying less interest on your mortgage will usually be more cost effective than the return you could get from a savings account. Use our offset mortgage comparison on our website to find a deal that could save you money.

How do offset mortgages work?

Both your mortgage and savings account will need to be with the same bank or building society so that they can be linked. The value of your savings will be deducted from your mortgage balance and you will only be charged interest on the remaining amount.

Please note that the savings account will earn no interest if you are using it for an offset mortgage and that you will only be charged interest on the balance of your mortgage minus the amount in your savings accounts.

For example, if you had an offset mortgage of £170,000 and £30,000 in your linked savings account, you would only be charged interest on £140,000.

You can usually withdraw money from the savings account whenever you need to, but you will lose the interest reduction on any cash you take out. This means your repayments may go up.

You can also take out an interest only offset mortgage which means you will be responsible for paying off the capital at the end of the mortgage ter

Offset mortgage options

Paying less interest on your mortgage means you will pay less interest overall while you clear the balance. Offset mortgages usually let you choose between the following benefits:

• A shorter mortgage term but the same monthly repayment amount - you'll pay off your mortgage more quickly and pay less interest as a result
• Lower monthly repayments - saving you money in the short term

Offset mortgage rates

Although offset mortgages work in a slightly different way to standard mortgages, you can still choose from both fixed rate and variable rate deals.

If you choose a fixed rate offset mortgage, the amount of interest you pay will typically be fixed for two, three or five years, making it a good option for those on a budget.

Alternatively, you could opt for a variable rate - tracker - offset mortgage. This tracks the Bank of England base rate and your monthly repayments can go up or down in line with the base rate's movements.

Keep in mind that offset mortgage rates are typically a little higher than standard mortgage rates. However, just like with standard mortgages, the mortgage rate you are offered will depend on your credit history and how much you want to borrow.

How to get the best offset mortgage

To find the best offset mortgage, it's important to shop around and compare the available rates. You can do this with ease by using our comparison table https://www.bartramandco.co.uk/mortgages

Make sure you factor in both the interest rate and the fee to find the best deal and consider whether you would prefer a fixed rate offset mortgage or a variable rate deal.

Pros and cons of offset mortgages

Benefits include:

• You pay less interest on your mortgage debt, meaning you will pay it off earlier, or you can choose to make smaller monthly payments
• You can still access your savings if required
• They can be tax efficient for higher rate taxpayers as you pay no tax on savings in a linked savings account
• Some offset mortgages let you link up to your current account as well as your savings account
• Most lenders let you make overpayments on an offset mortgage allowing you to pay off your mortgage more quickly and cheaply

Cons include:

• Offset mortgage rates can be higher than standard repayment mortgages
• You need a large amount of savings to make a difference
• You won't earn interest on your savings, disappointing when interest rates are high
• Fewer lenders offer offset mortgage deals so you may have little choice

If the best offset mortgage rates are high it may be better to use your savings to overpay a standard repayment mortgage instead

Badby & Farthingstone Cricket Club News

Preparations are underway for this year’s annual club day on Sunday August 15 2021 which will feature a bbq, bar, intra-club game, Kwik cricket for the kids, club presentations and a raffle. It’s a family day out so hope to see lots of you there. Proceedings start at 2pm

Good to report on another exciting finish (and a win) last Sunday with a one-wicket victory at local rivals Braunston CC. Set to make 153 in 30 overs, B&FCC got off to a flying start thanks to opener Ryan Haynes and Stephen Nelligan who both retired on 25.

The innings then lost some momentum until a spirited late middle order revival by Peter Mayne, Graeme Whitcroft and Keith Dyke put the visitors within reach of their target.

With one wicket left and still needing 15 off the final three overs, vice-captain Nelligan returned to the crease to hit the winning runs, finishing the match in style with a six over the square leg boundary.

Earlier tight bowling combined with good fielding and catching (two more for Colin Scott) kept the Braunston batsmen in check with Peter Mayne the pick of the attack.

The win made up for the previous week’s poor performance and loss at home to Everdon.

Vice captain Stephen Nelligan again excelled, this time with the ball, taking 3-14 just as the visitors were starting to take control. Will and George Dicks also gave valuable bowling support as Everdon recorded 156 for 8 off their allotted 30 overs.

In reply, the home side crumbled in the face of some excellent bowling by the visitors with only Ed Hall’s steadfast 25 providing much resistance. All out for 79 and a 77 run loss,  B&FCC’s poor batting performance did not spoil what was a good day’s cricket and social occasion as the home team took the opportunity to catch up with some familiar Everdon faces in a rivalry that goes back over a dozen years.   

Don’t forget that the club are still running taster sessions for juniors interested in getting into cricket throughout August. These will be held at the ground (Long Roods, Chapel Lane, Badby NN11 3AQ). Full details on the club’s Facebook page https://www.facebook.com/events/4042839432462543/

If you are interested in coming along to any of the sessions please email andynightingale234@gmail.com

Forthcoming fixtures: Sunday August 8 v Napton (h), Sunday August 15 Club Day (2pm), Sunday August 22 v Simon Bradshaw XI (h), Sunday August 29 Crick Lions (h)

Monthly draw: why not make August the month you win a case of Italian wines (red/whites/mixed)?

How To Enter: every valuation and instruction for sale or rental between now and Wednesday August 25 2021 will be entered, the winners being notified by e-mail.

So if you’re thinking of selling or letting your property and want to win this great prize call (01327) 359164 and speak to our sales or lettings team.

Best wishes

Craig Bees, MD Bartram & Co

Tel: (01327) 359164.

E-mail craigbees@bartramandco.co.uk
 


Report this article as inappropriate

Comments

You need to log in before you can do that! It's only a quick registration process to join the AMA network and completely free.