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Consumers `increasingly offsetting savings against mortgages`

13/03/2009

Consumers in the UK are increasingly offsetting their savings against their mortgages in a bid to make the most of their money.

This is according to uSwitch.com, which found that almost 1.9 million homeowners are considering this tactic in a bid to earn a return on their savings while interest rates are low.

According to the price comparison website, offsetting savings against a mortgage could save people nearly £40,000 in mortgage interest and cut the term of their loan from 25 to 18 years.

Higher mortgage rate payers would benefit most from doing this, uSwitch.com pointed out.

Louise Bond, personal finance product manager at the organisation, said: "Unfortunately, only five per cent of mortgage deals currently allow consumers to offset but this is something that would change if the demand for offsetting increased."

Interest rates offered on savings accounts continue to fall, with the base rate of interest now standing at 0.5 per cent following a cut of 50 basis points earlier this month.

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