Higher rate taxpayers with above average savings who are trying to find a mortgage for a longer period are being urged to consider current account and offset mortgages.
Financial research firm Defaqto claims that these customers could benefit in the long-term with regards to flexibility, tax-efficiency and a potentially shorter mortgage repayment term.
In addition, by committing to one of these mortgage deals, they could be saving money through avoiding remortgaging in a bid to get better mortgage rates, Defaqto research claims.
Offsetting allows mortgage borrowers to reduce their mortgage interest by the funds held in savings accounts and current accounts.
The higher the savings balance, the less interest is paid on their mortgage, which could reduce the mortgage term and repayments.
However, no interest is received on the savings .
"If offset mortgages are approached as a fundamental part of the borrower's financial planning process they can offer great benefits," comments David Black, report author and head of banking at the research firm.
However, he points out that offset mortgages are "definitely" long-term products and should only be considered if the borrower is certain that they could leave savings held in their savings accounts untouched for the term of their mortgage.
Defaqto says financial discipline is needed to make offset mortgages worthwhile.
"Any permanent reduction in the size of the deposit because of withdrawals will result in the borrower paying above market rates for the extra mortgage needed to balance the withdrawn savings," Mr Black concludes.
Wealthy borrowers urged to consider offset mortgages
Mortgage Quote Line
0845 108 0505
Wealthy borrowers urged to consider offset mortgages
Tue, 07 Mar 2006
Recommended links
Current account and offset mortgage guideApply for a free offset mortgage quote now
Millions to be saved by offset mortgages, IF says
Mortgage lender kicks off offset mortgages
Offset mortgages on the up
Offset mortgages praised
Offset Mortgages on the up
Offset mortgages for futures, expert says
Offset mortgages worth the hype
New offset mortgages from Coventry
Options for offset mortgages
Offset mortgages becoming more suitable
More savings with offset mortgages
Offset mortgages from Intelligent Finance
Higher rate taxpayers see price rise
| mortgages news |
|---|
| Yorkshire Building Society makes mortgage more accessible - Thu, 02 Sep 2010 |
| Lloyds TSB launches new fixed-rate mortgage - Thu, 02 Sep 2010 |
| Skipton launches new mortgage range - Wed, 01 Sep 2010 |
| More News |
Mortgage Rates by Lender 
Worried about Mortgage Repayments?
- Join our petition to Government to bail out burdened individuals, not just banks.
Free Mortgage Quote
Mortgages in Scotland
Equity Release
Switching Mortgages
Home Reversion Plans
Commercial Mortgages Arrears & CCJs?
Remortgages- Sub prime mortgages
- Arrears, CCJs
- Self certification
- Debt consolidation
Protect Your Mortgage