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offset mortgages


Tosh
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Thanks. i take it that a low rate taxpayer needs less of a difference between savings and mortgage rate. It's a neat idea now I think about it

 

First Direct do a Bonus Savings account at 4.25%

and their offset mortgage rate is about 5.9%

 

So a savings in the account worth 1.75x the size of the mortgage (5.9/4.25 =1.38 x 1.25 tax), the mortgage would effectively be at a rate of 4.25% (opportunity cost)

 

Which is better than the Bristol and Wests 4.8% discounted mortgage rate

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