(FHLB) 10 Year 10 Year Fixed Mortgage Rates Refinance 10 year refinance mortgage rates today 15 Year Fixed Mortgage Rates Refinance 2% 2018 2019 5 Residential A Couple Of Home Loans Discussed A Credible Source a Land Loan A Mortgage Refinance Activities Adjustable Mortgage Adjustable Rate Mortgage Adjustable Rate Mortgages Advance Advantages Affordable Housing Program Agenda Amenities Anatomy Mortgage and California Application Applications rise Apply For a Home Loan Apply For a Loan Online Apply For Loan Online Apply For Loan Online Personal Target Markets Apply For VA Home Mortgage Loan Applying home loan Approval Approval Home Loan ARM Arm Mortgage ARM program ARM's Arrangement Atlanta Authorizing Refresh auto Avoidable Mistakes Awful Obligation Bad Credit Bad Credit Home Loan Bad Credit Home Loan Lender Bad Credit Mortgage Refinancing Bad Debt Bad Home Loans Bad Program Balloon Mortgages bank Bank Housing Loan Bank of America Bank of Canada Bankruptcy banks tighten grip Barclays basics Mortgages Benefits Benefits of FHA Loans Best Best Banks To Refinance Mortgage Best California Mortgage Rate Refinance Best cash Best home equity loan lenders Best Home Loan Best Home Loan Rates Best Mortgage Refinance Calculator Best Place To Refinance Your Home Boost Boston Brexit Broker Brokers Budgetary Business Buy Your Dream Home With Home Loan Buyer Buyers Buying A Home Buying A Home After Bankruptcy Ca Home Refinancing Calculator Calculator Amortization CalHFA California CalPLUS Canada Card Obligation Cargo Cash Out Mortgages Cash Real Estate Cash-out Mortgage Refinancing Cash-out Mortgage Refis Cash-Out Refinance Cash-Out Refinance Loan Chandigarh Cheapest Rate Home Loan Check Checklist Chicago Choose Mortgage Refinance Lender Cincinnati Claim Tax Benefits Closing Closing Cost of Mortgages Closing Costs Attached Closing Costs For a House Commercial Bank Loan Commercial Loan Calculator Company Compare Compare Home Loans Compare Lending Mortgage Compare Loan Compare Mortgage Rates Contrasts Control Controls Conventional Costs Counsel Countrywide Countrywide Home Loans Couple in police net Credit Credit Check Credit Grade Credit Inquiries Credit Profile Credit Recommendations Credit Report credit score Credit Scores Home Loan Current Mortgage Lender Dallas Debt Consolidation Debt Consolidation Loans Debt Refinancing Decent default Mortgage Defensive acquiring Des Moines Different Types of Home Loans Direct Lenders vs. Brokers Disadvantages Discharge Discover Distinctive Down Payment Driven E.C.B Education Elderly Day-Care Services Embrace Home Loans Employees Encourage Ensure Equity Exhortation Facts FAQ's Cont'd FAQs Mortgage Federal federal home loan Federal Home Loan Bank Federal Home Loan Bank of Atlanta Fee FHA FHA appraisal FHA Foor credit Home Loan-Dont Let Bad Credit Stop You FHA Home Loan Requirements FHA loan FHA Loans FHA Refinancing Programs FHL FHLB-NY FHLB's FICO Finance Agen Financial Financial Planners financing Find Find a Great Mortgage Rate FIND THE RIGHT LENDER First Quarter First-Time Fixed Fixed Home Loan fixed interest rate loan Fixed Rate Mortgage Fixed Rate Mortgages Fixed-Rate Mortgage Fixed-Rate Mortgages For America Express Foreclosure Foreclosure Procedures Foreshadow Fort Wayne Home Loan Fraud Risk Free Freedom Mortgage Freedom Mortgage Home Equity Loan Rates Frequalify Home Loan Future Government Home Refinancing Great Migration Greensboro Home Loan GTE Home Loans HAMP Happy New Year Hard Money HDFC HDFC Bank HEL HELOC Helpful Hints Helpful Information Hold Off on Short Hom Loan Rate home Home Affordable Loan Home Affordable Refinance Program Rates Home Builders Home buyback Home Buyer Home Buyers Home Buying Home Buying Process Home Equity Home Equity Loans Home Equity Credit Line Home Equity Credit Lines Home Equity Lending Home Equity Line Home Equity Line of Credit Home Equity Line Of Credit Tax Home Equity Lines of Credit home equity loan Home Equity Loan Basics Home Equity Loan Interest Home Equity Loan Rate Home Equity Loans Home Equity Loans With Bad Credit Home Equity Rates Home Equty Loan Home Finance Home Improvement Home Improvement Funds Home Installment home loan Home Loan Application Home Loan Bank Act 2019 Home Loan Bank of America Home Loan Calculator Amortization Home Loan Eligibility Calculator Home Loan For Bad Credit Home Loan Grants Home Loan Improvement Home Loan Interest Rate Home Loan Investment Bank Home Loan Lines Of Credit Home Loan Modificatio Home Loan Modification Home Loan Modification Plan Home Loan Modification Programs Home Loan Mortgage Home Loan Mortgage Generic Home Loan Now home loan Online Home Loan Process Home Loan Programs Home Loan Rates Home Loan Repayment Home loan Settlement home loans Home Loans Advert Home Loans Agent Home Collection Home Loans Appliances Barnsley Home loans mortgage generic Home Loans Standard Bank Home Loans UK Jobs Home Mortgage Refinance Home Mortgages Home Owner Home Prices Home Purchase Home Refinancing Home Value aAdvance Home Value Credit Home Value Credits Home Value Loaning Homeowners Homeowners Refinance Homes For Sale House Loan For Mortgage house Payment Household Lending Housing Housing Collapse Housing Counseling Housing Finance Agency Housing Program how How To Shop Low Rates HSBC IBISWorld ICICI Bank Income Assets Increasing Independent Indian Bank Home Loan Indianapolis Influence Influence Your Home Advantage Loan Cost Information insurance Interes Interest Interest Rate Interest Rates International Investing Requirements Investment Property Loan IRRRL IRS Islamic Italian Bank July 2008 Jumbo Loans Jumbo Mortgage Jumbo Reverse Mortgages Lawyer Lender Mortgage Private Lenders Lending Level Licensing Update Limit Limited Cash Out Mortgage Line of Credit lines of credit Literacy Lloyds loan Loan Application Loan Calculator Loan Comparison Loan For Home Loan Interest Rates Loan Investment Loan Modification Loan Officer Loan Process Loan Specialist Loan Zone Loan-to-Value Loans LOC Look Before You Leap For That Home Loan Low Down Payment Low Interest Rates LowEnd M&T Bank Make Market Launch It Is It Worth Millions Manufactured Manufactured Home Loans Market Marketing Master MBA Merits Miles Mistakes Mobile Home Loan Modification Modification Program Modification Program Process Money Money Lender Moneylenders Month Morgage Mortgage Mortgage Adviser Mortgage And Refinance Mortgage Application Mortgage Applications Mortgage Banks Mortgage Basics Mortgage Broker Mortgage Calculator Refinance Mortgage Calculator Refinance Breakeven Mortgage Calculators Mortgage Closing Statement Mortgage Companies mortgage compare interest rate Mortgage Financing Mortgage Insurance Mortgage Interest Rates mortgage lenders mortgage lending mortgage loan Mortgage Loan Debt Mortgage Loan Process Mortgage Loan Programs Mortgage Loan Programs Cont'd Mortgage Loan Refinance Mortgage Loan Refinances Mortgage Loans Business mortgage market Mortgage Programs Mortgage Rates Mortgage Rates at 8 Mortgage Rates Refinance Mortgage Refinance Mortgage refinance home Mortgage Refinance Loan Mortgage Refinance Stimulus Plan Mortgage Shop Rates Mortgage Standard Bank Mortgage Standard Bank Mortgage Rates Mortgage Trends Mortgage Types Mortgages Mortgages Loan Mortgages Programs Moving Moving Tips MSE loans Named Nationwide Personal Home Loans NCR Negotiating New Mortgage New York No Credit No Credit Check Home refinance No Credit Check Loan No Credit Check Mortgage Loan No Money Down Doctor morgage No upfront Fee November Obama “Sounding” Strong at the State of the Union Obama's Tightening Online Applications Online Loan Shopping Online Loan Shopping Tips Overcoming Refinance Participates Partner Pay Payment Payment Ease Program Personal Loans Physician Home Loan Pittsburgh Plan Planned Mortgage holders Planning Pre-qualifying Premium Prepaid Property Prevent Wider Crisis Price Prime Lenders Proficient Programs Property Appraisal Property Buyer Property Taxes Purchase A Residential Home Purchase Your Home Purchasing a Home Quick Rate Quotes Raises Variable Rate RBI Real Estate Real Estate Agent Real Estate Settlement Procedures Act Realty Sector Reap Refi Refinance Refinance A Home Loan refinance home - refinance mortgage Refinance Home Loan Quotes Refinance Lenders 2019 refinance mortgage Refinance Mortgage Hurdles Refinance Mortgage Information Refinance Mortgage Interest Rates refinance mortgage rate Refinance Your Mortgage Refinance Your Mortgage Online Refinancing Refinancing Equity Loans Refinancing Headaches Refinancing Mobile Home Refinancing Mortgage Related Renegotiate Renegotiate Home loan Data Renegotiating Renegotiating Your Mortgage Renewing Repo Requirements Reserve Bank Reserve Bank Consults Residential Complexes Resign RESPA Restoring Restructure Retire Reverse Reverse Mortgage Reverse Mortgages Rising Interest Rates Rules Rules Less Than Promised s Helped Boost Sales San Francisco Saving Money on Your Mortgage SBI Scandal Seattle Second Home Owner Secured Home Equity Loans secured loan Securing A Home Improvement Loan Settlement Sierra Home Loan Slowdown Small Businesses Smart Solution Has a Dream House Stamp Obligation standards Streamline VA Loan Sub Subsidence Coming Success System t Rate Take Over KPR 2018 Tax Benefits Tax Deductible Tax Law Term Fixed The Interest Alternative The Intrigue Elective The Offset Mortgage tighten Tightened Tips Topeka Trust Trust Mortgage Brokers type of application fee Types UK Home Loans Unchanged Understanding Understanding No Credit Check Loans Unsecured Uptick usaa USDA USDA Home Loan USDA Programs Utilizing VA VA Funding Fee VA home loan VA Home Loan Program VA Home Loans VA Home Loans Houston VA Home Loans not Affected by S&P’s U.S. Credit Rating Downgrade VA Home Mortgage VA Loan VA Loan Houston VA loan pre-approval VA Loans VA Loans Soar in Texas VA mortgage checklist VA Mortgage Loan VA Mortgage Loans Houston VA Refinance Home Loans VA Streamline Loans Value Values Variable Home Loan Variables Influence Home Advance Rates Vehicle Wells Fargo Wells Fargo Home Loan Modification Wells Fargo Home Loan Modification Tips What Factors Affect Home Loan Rates? Wildfire World Bank Year High Zero Balance Program

The Offset Mortgage – Why Is It Growing In Popularity?

The Offset Mortgage – Why Is It Growing In Popularity? - The biggest innovation in the mortgage market in recent years, the offset mortgage, is now starting to take a significant share of the market. Now, only six years after they were introduced, the offset and the current account mortgage account for 10% of all borrowed mortgage capital.

The Offset Mortgage, Mortgage

According to one of the UK's largest mortgage lenders, as many as 25% of existing mortgage holders could save money in the long run by choosing an offset mortgage. If you're one of those possible 25%, then it's important that you are aware of the facts.

What exactly is an offset mortgage?


Here's the concept: you borrow capital from the mortgage lender and you also have savings sat in another account. Instead of paying interest on your full loan and earning interest on your savings, you pay interest on the amount you borrowed minus the amount you have saved. For example, if you had £25,000 savings and a mortgage of £110,000, you would only pay interest on the sum total of debt, which would be £85,000. Your savings would not earn any interest on a separate level, they would only be linked to the mortgage.

So what's the big selling point?

The major advantage to this kind of mortgage, particularly where higher tax payers are concerned, is that you end up paying less interest. This transpires because you are not earning interest on the savings, and as you know, the taxman always takes a fair amount of that interest away from you. If you have significant savings, then you lose a lot to the taxman – but not with the offset mortgage. That's why this type of mortgage is so well suited to people that have to pay over 40% tax.

These calculations illustrate the potential savings:

£100,000 mortgage - 25 years

Interest rate - 4.69%

£20,000 deposit

Traditional mortgage interest payments - £85,351

Offset mortgage interest payments - £41,998

Saving - £43,353

With the offset mortgage you would also complete the mortgage after just 19 years and 4 months. This is because the monthly repayments are calculated without your savings being included in the equation – therefore you would overpay, and finish paying it off early.

On average, a standard rate tax payer could feasibly save £9,538 in tax and a higher rate taxpayer a considerable £17,341.

There's also the benefit of flexibility – the offset is a lot more forgiving than the traditional mortgage and you can overpay, underpay and take payment holidays without penalties.

If it's that great, why isn't everyone doing it?


Offset mortgages used to have high interest rates, putting many borrowers off at the first hurdle. But as this type of mortgage has started to take off, lenders are offering better and more competitive interest rates.

The interest rate is however, still considerably higher than with the fixed rate mortgage for example, and it's important that anyone considering an offset mortgage can be sure that the tax savings will cover the higher interest charge. It's the kind of calculation that can only be accurately provided by a professional mortgage adviser.

As a rule, the standard taxpayer must have savings of £20,000 to put against a £100,000 mortgage to make the offset worthwhile. A higher rate taxpayer would only need £10,000 to justify this type of mortgage. (These calculations were made in reference to an average 4.69% fixed offset rate, and a 4.49% tracker mortgage.) These figures will obviously change with the potential rise and fall of interest rates, and as we project, offset and traditional mortgage rates move closer together.

The many variations on the offset mortgage

Mortgage lenders, in their bid to win your business, offer different incentives that they hope will give them the competitive edge. The most common incentive is a free property valuation or free legal work. The banks have a head start as they can include your current account in the offset calculation as well as your savings, but other lenders will let you offset two different savings accounts. Others will offer a borrowing facility and a chequebook.

The interest rate also varies considerably – from a 6-12 month fixed rate, to a tracker guaranteed to stay below the base rate for 6 months, or a tracker which tracks the base rate for a set amount of years, but also charges a minimal premium.

The amount you are borrowing compared to the value of the property will also affect the interest rate. At the moment one lender will give an interest rate of 5.6% for people that are borrowing less than 50% of the property value, whereas anything above that (up to 99%) will have an interest rate of 6.45%.

The concept may be easy for you to get your head around, but the sums won't be. See an independent mortgage adviser for individual advice tailored to your circumstances, it's the only way to be sure that the offset is best for you. However, we think that if you have savings and pay interest at a higher rate, you'll be onto a winner with the offset. 



By: Michael Challiner

Posting Komentar

[blogger][facebook]

Author Name

Formulir Kontak

Nama

Email *

Pesan *

Diberdayakan oleh Blogger.