Offset mortgages could save homeowners £11,000

Four million households across the UK could save more than £11,000 each by putting their mortgage, savings accounts and current accounts into one offset mortgage, claimed the Yorkshire Bank.

According to research by the bank 29 per cent of UK homeowners hold savings accounts, current accounts and mortgages with the same provider but, because they have not combined them into an offset mortgage, are missing out on savings which collectively total £29 billion.

Combining their financial products could help them gain better tax efficiency as well as help homeowners by better managing interest.

"With the recent rises in the Bank of England’s Base, many offset mortgage homeowners can see the positive balances in their savings and current accounts working even harder to offset the mortgage interest," said Gary Lumby, Yorkshire Bank’s head of retail.

Meanwhile, the Council of Mortgage Lenders (CML) reports that the number of offset mortgages have grown faster than non-offset products.

Between April 2006 and March of this year, there was a 49 per cent rise in offset mortgages sold, while stand alone mortgages only grew by 15 per cent.