An offset mortgage is a mortgage where you can use savings to reduce the amount of interest you pay. The savings are ‘offsetting’ the amount of interest you pay, a savings account is opened and linked alongside the mortgage account.
For Example: – if you take a mortgage for £500,000 and you have £200,000 in ‘offset’ in the savings account then you will only pay interest on £300,000 difference.
You can choose to either pay the same monthly payment and use the saving to reduce the term OR you can use the savings to reduce your monthly payments.