Use Offset Remortgage When the Time is Right

A unique type of remortgage called an offset remortgage is available when savings have accrued into a substantial amount, and its possible to be used towards the remortgage process.

When savings reach a respectable amount, an offset remortgage can provide an avenue for those savings to work for you.

First, the savings must be located in the same bank or building society in which the remortgage loan will be. Those savings are then offset against the remortgage amount, with the difference between the two left as the amount the interest is paid on.

For example, the remortgage amount is 100,000 pounds and you have 20,000 pounds in savings. Interest will then be paid on 80,000.

Several advantages come with this type of loan. They are:

-If savings accounts interest rates are low, it will be more advantageous to realize the savings in remortgage interest

-The offset savings are accessible, so if an emergency comes up, it can be handled

-Offset remortgage rates and conventional remortgage are comparable

-If it is not possible or if you need to take a break for a month or underpay; most offset remortgage allow you to do this as well

With the advantages come the disadvantages. Here are a few:

-The savings stop earning any interest

-Being able to dip into the savings means a higher interest rate in the long term since the offset amount will be reduced

-Offset remortgage loans are usually variable rate loans tied to the base rate, which means as it increases the monthly payment increases

The offset remortgage is for individuals with unique circumstances. Solicit advice from a remortgage specialist to make sure this is a favorable remortgage for you.