sauveur
Apprentice
Joined: 22 Apr 2007
Posts: 6
|
 Posted: 01/03/08 - 11:45 Post subject: |
 |
|
| Hello everybody! Five years ago I decided to buy a house, together with my wife, so we took a mortgage. So far it’s going good. We earn enough to pay back the mortgage, all the utilities and, in general, to have a good life. In a conversation with a friend of mine, I found out about offsetting mortgage interest using an offset account. Since I’ve never heard of it before, can somebody explain to me what it’s all about? Thank you. |
|
dene
Apprentice
Joined: 27 Jul 2005
Posts: 5
|
| Posted: 02/01/08 - 23:34 Post subject: |
|
|
| Hi there! It’s good that you are able to keep up with your mortgage payments, but it’s not a bad idea to offset your mortgage interest. One of the ways to do it is by offset account. As your friend told you, an offset account is an account with which you can decrease the interest on your mortgage, by reducing loan balance. Usually the lender will give you an offset account, if it is an option. How it works? Well, if your mortgage is on 200 000 pounds and you have an offset account of 30 000 pounds, your interest will be calculated on 170 000 pounds. As you can see, it can save you some money. You need to have two separate accounts, one for your mortgage and the other for the offset account. Then, the interest rates will be calculated separately. They may have the same interest rates, but it doesn’t have to be the case. So, think about it and see if it works for you. Bye! |
|
