More borrowers could potentially consider an offset mortgage to maximise their savings returns, according to Coventry Building Society’s analysis of the latest Bank of England figures.
The data shows there was £273bn in UK savings accounts paying zero interest at the end of September, this is over £2bn more than October.
The figure has increased by 6.37% in the past year, which amounts to an extra £16.3bn from October 2021 to October 2022.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “In periods of high inflation, where people generally have less disposable income to fall back on, there could be more people who want to keep their savings accessible.
“At the same time, it’s important for their money to work harder for them – an offset mortgage could be an ideal solution.
“There may be borrowers who, for example, aren’t sure if they should reduce their mortgage balance to help combat interest rate rises or keep their money in accessible savings, just in case.
“An offset mortgage gives borrowers an option to essentially do both – they can use their savings to reduce the amount of interest charged on their mortgage, while still able to access their money if they need it.”
The data also shows the total amount of household savings stands at over £1.72trn.
This includes amounts held in current accounts, easy access, fixed rate bonds and cash ISAs.
Stinton added: “It’s worth running through an offset calculator to quickly find out if an offset product could be suitable.
“This will highlight how much money could be saved over the term of the mortgage, or how much quicker the mortgage could be paid off.”
He concluded: “Giving this insight really drives home the value of advice; clients get to see that brokers are the ones who can educate them on products and solutions which might otherwise be unknown to them.”
