66 . 7 %

By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 22nd October 2020*

An offset mortgage can be a great way to save money on your mortgage repayments. It could help you reduce monthly payments and get you on your way to becoming mortgage-free faster.

But many people don’t fully understand how offset mortgages work or are put off because they think it could be a limiting or expensive option.

However, an offset mortgage can be a fantastic money-saving tool. Whether it will work for you will depend on the particulars of your situation.

We get lots of people calling us about offset mortgages so we’re well placed to connect you with an expert advisor who can help you find the best offset mortgage deal.

In this article we’ll cover…

Or skip the article and jump straight to getting some expert advice from one of the mortgage brokers we work with. Call 0808 189 2301 or make a quick enquiry online.

We’ll find the perfect mortgage broker for you - for free

Save time and money with an expert mortgage broker who specialises in cases like yours

  • We've helped over 120,000 get the right advice
  • Our form only takes a minute, then let us do the hard work
  • Save up to £400 per year with the right advice (source: FCA)
  • All the brokers we work with have whole of market access

Which banks are offset, mortgage providers?

Good news!  A lot of banks provide offset mortgages, so there are a variety of schemes you can choose from. Building societies, credit unions and other types of lender off them too.

A whole-of-market offset mortgage broker will help you quickly assess all available products and get you access to specialist offset mortgages that aren’t available to the general market.

Choosing which offset mortgage provider could be best for your circumstances is a major decision; doing your background market research with the help of one of the expert brokers we work with could positively impact your financial situation for many years to come.

The providers listed below will help you gain an understanding of who offers offset mortgages, but bear in mind, this is by no means a comprehensive list of offset mortgage lenders.

First Direct

You can get an offset mortgage with First Direct, an expert broker could help you calculate rates and compare this to other mortgage deals.

However, their terms and conditions will impact whether or not you qualify and there are restrictions to getting an offset mortgage with this lender.

You will need either a sole income of £50,000 or a joint salary of £75,000 to be eligible.

Depending on your interest rate, Early Repayment Charges (ERC) could apply.

How much tax benefits you would be able to claim will depend on your circumstances, and could change as tax rules are updated.

First Direct doesn’t lend to buy-to-let or business offset mortgage customers.

HSBC

As one of the UK’s largest lenders, HSBC offers a range of mortgages. They slashed rates across many of their mortgages at the start of 2019 to offer a competitive deal.

Use an HSBC offset mortgage calculator to find out if their rates work out favourably for you and speak to a mortgage broker to quickly compare these to other deals on the market.

Santander

To apply for a Santander mortgage you need to fulfil their eligibility requirements, some of these include:

  • Being a UK resident and at least 18 years of age.
  • Intending to live in the property.
  • Never having had a home repossessed.
  • Never having been declared bankrupt.
  • And you must be able to provide proof of all types of income.

Use a calculator and speak to an expert to review options for an offset mortgage, or flexible offset mortgage with Santander.

Although many lenders decline for those who don’t match stringent requirements, there are still options available for people with negative credit ratings, non-traditional or varied income, or those who have been bankrupt in the past.

Make an enquiry and we’ll introduce you to one of the mortgage broker experts we work with if you’re unsure which providers you may qualify for.

Natwest

Natwest offers flexible offset mortgages which allow you to link your savings account to your mortgage.

It’s only available to over 18-year-olds and other terms and conditions and restrictions will apply.

You can calculate rates offered with an online calculator. Make an enquiry and get free expert advice on how to apply and get the mortgage that’s right for you.

Barclays

Barclays offers offset mortgages along with a wide range of its current and savings accounts as well as options for transferring other accounts to set up an offset mortgage.

Calculate how much you could save with an online calculator and speak to an expert mortgage broker to compare offset mortgage rates with other offers on the market.

Nationwide and Halifax

Nationwide and Halifax are both examples of major lenders offering flexible offset mortgages subject to a range of criteria.

However, to be eligible, you must match their credit rating and financial history requirements.

An online calculator can help you compare rates and one of the specialist experts in offset mortgages we work with can help show you how they compare to lenders across the UK.

Yorkshire Building Society

The Yorkshire building society (YBS) offers a range of options for repayment of an offset mortgage.

Yorkshire Bank

A Yorkshire Bank offset mortgage gives you the option of opening up to six linked Yorkshire Bank offset accounts which could be made up of any range of eligible savings and current accounts.

But remember, you can’t receive interest on any savings linked to your offset mortgage.

Scottish Widows

Also part of the Lloyds Banking Group like Halifax, Scottish Widows’ flagship product is their offset mortgages. As a lender, they are geared towards lending to professionals.

This is because they’re generally higher-rate taxpayers, meaning their income tends to be more complex, in order to be tax efficient. This opens the door for funds being held back for self-assessment etc. can be used to benefit an offset mortgage.

How to apply for an offset mortgage with an offset lender

Before you apply with an offset mortgage lender, it’s important to first understand what the providers’ requirements are for mortgage applications.

Experts recommend speaking to an independent broker who can give you an overview of the market and advise on the right provider for your needs and circumstances.

This will ensure that you not only get the best deal, but also avoid making too many mortgage applications which could be bad for your credit report and even put future applications for finance at risk of refusal.

In addition, specialist lenders for certain niches cannot be approached directly, you have to access them through brokers.

Here’s a further, but by no means comprehensive, list of offset mortgages the brokers we work with could help you connect with…

  • Lloyds Bank
  • Coventry Building Society
  • Clydesdale Bank
  • Virgin Money
  • RBS
  • Woolwich
  • TSB
  • Accord
  • Bank of Scotland
  • Bank of Ireland
  • Handelsbanken
  • Metro
  • Tesco
  • Nottingham Building Society
  • Leeds Building Society
  • Newcastle Build Society
  • Ulster Bank
  • Principality
  • Chelsea Building Society
  • Danske Bank
  • Beverly Building Society

Get expert advice in finding the right offset mortgage lender

There are many factors that could impact whether or not an offset mortgage is right for you, or which lender would be best suited to your needs. You’ll want to ensure that you’re making a saving and maximising potential tax efficiencies from using your savings in this way.

The brokers we work with have a deep knowledge of the market and good relationships with providers, so they can save you countless hours and money by helping you connect with eligible best rate offers.

Call Online Mortgage Advisor on 0808 189 2301 to speak to a broker we work with or make an enquiry online.

A specialist offset mortgage broker will help you find the best rates,  discover if you’re better off with a different mortgage type, or should consider investing your savings for more return in a  high-interest account or by using a long-term investment instead.

Whatever your situation and needs, get in touch and we can help you get to where you want to go. We don’t charge a fee and there’s no obligation or marks on your credit rating.

Updated: 22nd October 2020
OnlineMortgageAdvisor 2020 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Find out more about Offset Mortgages

Offset Mortgages