Offset Mortgage Saves Borrowers Money

by | Wednesday 26th Oct 2022 | Mortgage Case Studies

Couple make the most of an offset mortgage

Key facts:

  • Clients owned their own property with £150,000 outstanding on their current mortgage
  • Both clients were in their 50’s and hoping to retire in a few years
  • They had money in savings and for a while had considered clearing their mortgage with this money, to keep costs down in their retirement.
  • Unfortunately, their property was in need of some extensive home improvements too, and if they cleared their mortgage, they would have no money left to carry out the improvements. They would also use up most of their life savings.
  • With a mortgage outstanding and a property in need of work, the clients decided to contact our advisors at Oportfolio to see how we could help.

Read our article What Is An Offset Mortgage? to find out more about this type of mortgage.

Our clients:

The clients had owned their own property for many years and after paying the loan down over these years, they had a balance of around £150,000 outstanding. Now that they were in their 50’s and considering retirement in the near future, our clients wanted to potentially pay off their mortgage to significantly reduce their monthly credit commitments. They had life savings of a couple of hundred thousand and initially intended to use this to clear the mortgage however, their property also needed some home improvements to it which were going to be quite pricey.

They were in-between a rock and a hard place as they wanted to keep monthly costs down, wanted to carry out the improvements to their property, and also didn’t want to use up all of their life savings. So, they contacted our advisors to see how we could potentially help.

How did we help with an offset mortgage?

The couple approached Oportfolio to see what solutions we might have for them. Our senior mortgage and protection advisor Jade had a one-to-one appointment with the clients and got to know their ambitions and needs. She identified that the priority for the clients was making sure that they are financially secure and aren’t left worse off if they give up their life savings. Jade carried out some in-depth research for them and found out that an offset mortgage might be the best option for them.

An offset mortgage would allow the clients to remortgage their property but offset some of the debt against their large amount of savings. This means that the clients were able to reduce their monthly mortgage costs down or if they decided to offset the entire £150,000, the monthly cost would be zero! And they were still able to retain and access their own savings.

The clients were able to significantly reduce their monthly outgoings, which was what they were hoping to do. They were also able to use some of their savings to carry out improvements to their property, which in-turn increased the overall value of their home. Because they didn’t need to clear their mortgage balance, they also had saving left over as a safety buffer, ensuring their financial security.

What was the offset mortgage rate?

The loan was secured on an interest only basis for 2-years at 1.87%. After the fixed period, they would revert to the bank’s 4.49% standard variable rate at which time we will contact the clients to discuss remortgaging or re-structuring their mortgage if they choose to. The mortgage term was 17 years.

If you or anyone you know is in a similar situation to our clients and you think an offset mortgage might be a good option, please feel free to give our advisors a call today to see how we can help. You don’t need to already be a client of ours. We are happy to help anyone who needs a hand.

We're Here to Help

If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

As featured in

Understanding a Volatile Mortgage Market eBook

Download Our eBook

Join our mailing list and receive a link to our latest ebook, Understanding a Volatile Mortgage Market. 23 pages of practical insights to navigate the unpredictable mortgage landscape.

You Will Receive A Link To Your eBook Shortly!