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Glossary · Mortgages

Offset mortgage

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By the Money Guide editorial team · Editorial responsibility: Kaiser Khan, Editorial Director · How we check facts

Definition: A mortgage linked to a savings account where your savings balance reduces the interest charged on the loan, instead of earning interest itself.

Useful for higher-rate taxpayers because you effectively get a tax-free return at the mortgage rate. You retain access to the savings, but they no longer earn separate interest. Rates are usually slightly higher than equivalent fixed deals.

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