Content Writer
Mortgage Advisor & Director
Offset mortgage providers can be more challenging to come by, but they are available in the UK. Each lender has its criteria, however, so it’s a good idea to seek out guidance from an experienced mortgage broker, like ourselves, when choosing the right lender for you.
What is an offset mortgage lender?
An offset mortgage lender is any mortgage provider able to offer an offset mortgage within their product range. As lenders also need to offer a linkable savings or current account, those offering this type of product are limited to banks and building societies.
Offset mortgage criteria are typically the same as they are for other mortgages for the most part, but offset mortgage lenders also require that you hold an account with them that can be linked to your mortgage account. If you aren’t an existing customer, you would need to open a bank account with them alongside your mortgage.
Some lenders also require you to deposit a minimum set amount into any new accounts held with them, and there may be a requirement to maintain that minimum balance. You may also need a larger deposit for this type of mortgage lender, although the deposit required will depend on both your circumstances and individual lender’s LTV (loan to value) limits.
Speak to a broker who specialises in offset mortgages
Best lenders for offset mortgages
When selecting an offset mortgage lender, keep in mind that there are different types of offset mortgages, so it’s a good idea to review all options available to you. Here are some examples of offset mortgage lenders and the main criteria associated with their offset range:
1. Family Building Society
Family Building Society has an offset saver mortgage, which allows you to link up to four savings accounts to one mortgage.
They are no longer providing offset products for new customers; however, if you’re an existing offset mortgage customer of theirs, you can apply for a product transfer, or you can apply for additional borrowing on your existing offset mortgage.
2. Accord Mortgages
Accord Mortgages offers offset mortgages for residential customers only. They require that an account is opened alongside your mortgage with Yorkshire Building Society, however, they do not have a minimum balance requirement to open an account.
There are 3 repayment options offered: you can choose to reduce your current mortgage payments, reduce your future mortgage payments, or maintain a ‘static’ payment, which means that you’ll repay the mortgage sooner. You’ll need a minimum deposit of 25%, and deals are available as 2, 3, or 5-year fixed or 2 or 5-year trackers.
3. Clydesdale Bank
Clydesdale Bank provides flexible offset mortgages, which have an overpayment and payment holiday facility available. The maximum LTV available is 80%, so you’ll need a mortgage deposit of at least 20% of the property value.
They allow for both current and savings accounts to be linked to the offset mortgage account, and you’re able to choose whether to opt for reduced mortgage payments or set payments with a shorter mortgage term.
4. Barclays
Barclays offset mortgages are only available as 2 or 5-year tracker deals. The maximum LTV is 75%, so you’ll need a 25% deposit to qualify. They are only available for residential borrowers. The terms allow repayments to be reduced or the mortgage term to be reduced by the interest savings, depending on the borrower’s preference.
5. Coventry Building Society
Coventry Building Society offers both interest-only and repayment offset mortgages for residential mortgage customers. Interest savings can be used to reduce the repayments or to shorten the mortgage term, but only one account may be linked to the mortgage. There is no minimum or maximum savings balance allowed on the linked savings account, and overpayments are allowed.
6. Scottish Widows
Scottish Widows offers an ‘offset saver account’ which can be paired with your offset mortgage. There is no minimum savings balance required, and you can transfer savings in and out of the account as required.
With a Scottish Widows offset mortgage, you are also able to make overpayments on your mortgage. You can opt to use the interest savings to reduce either the monthly repayments or the mortgage term.
Buy-to-let offset mortgage lenders
Finding an offset mortgage provider for a buy-to-let property can be quite difficult. Family Building Society has previously offered offset mortgages to individual landlords, however, they will no longer be accepting new applications. If you already have an offset buy-to-let mortgage with them, however, you can apply for additional borrowing or a product transfer.
Some specialist lenders may be able to provide offset mortgages, however, usually, these are only available through an intermediary, like ourselves.
How to choose the right offset mortgage lender
At Teito, we’re experts in offset mortgage products and can help you to secure the right type of offset product and lender for your needs. It can be beneficial to have another set of eyes when comparing offset deals against using your savings to increase your deposit size to ensure you’re making the best possible use of your money.
Other offset mortgage customers chose Teito because:
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We have access to the entire market, and offset deals can be harder to find and compare
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Our expert brokers specialise in offset mortgages and can do a quick rate comparison for you
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We offer a free, no-obligation initial chat with one of our specialists
So what have you got to lose? Get started here.
FAQs
Some lenders only provide offset mortgages to customers who already bank with them. However, usually, you’re able to open an account alongside your mortgage when you apply.
You may need to deposit a minimum balance into a new savings account before it can be linked to an offset mortgage, but not all lenders require this.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.