Learn to be a Financial Hunter - Not the Hunted
|
|
|
|
|
|
|
You Are Here: Home > Personal Finance > Mortgages > FAQs > Question & answer
What is a Family Offset Mortgage
Want to improve your credit rating? Consider using a low-limit Credit Card as a strategy of monthly borrowing and repaying. It works wonders. Find out more.
A Family Offset Mortgage works in a similar fashion to an Offset Mortgage taken by a single person but as the name suggests all the family's savings are taken into account.

For example -

  • The total mortgage loan is £200,000
  • Father has £35,000 in savings
  • Mother has £20,000 in savings, and
  • Little Jonny has £5,000 in savings

Collectively the family's savings are £60,000 so interest is only charged on a mortgage debt of £140,000 (£100k - £60k). However if one family member needs to withdraw a portion of their savings, this amount is then added to the original debt.

Conversely if any further money is paid into the offset account, the mortgage debt is further reduced.

The downside to this strategy is that nobody receives an actual income on their savings.

One final point - Only a small number of lenders will offer family offset mortgages. Plus, as the market is relatively small any deals might not be that competitive. Still, if you're interested they're worth investigating.

FREE Report: How to get the right mortgage at the best price
It takes just 4 easy steps
How to make sure you don't overpay on charges
Learn to quickly sort through the market maze
How to get a flexible deal - why this is so important
Download the Free Report
[an error occurred while processing this directive]

© 2017 LearnMoney.co.uk All rights reserved

The information on the LearnMoney.co.uk website has been compiled from sources believed to be reliable, but is not warranted to be accurate or complete.
All recommendations and comments are provided for general interest only and should not be construed as advice.
Professional advice should always be sought before buying or investing in any financial product.
The price of securities and any income from them can go down as well as up.
Past performance of a security or market is not necessarily indicative of future trends.
Any opinions and recommendations on LearnMoney.co.uk are given in good faith, but without legal responsibility and are subject to change without notice
.