Offset Mortgage

Offset Mortgages link your mortgage with your current and savings accounts. The money in your accounts are 'offset' against your mortgage balance, so you reduce the interest you owe on your mortgage. Instead of earning a tiny amount of interest on your savings and current account, you don't pay interest on the equivalent amount of the mortgage balance.

So for example, if you have a €200,000 mortgage, €3,000 in your current account and
€9,000 in your savings account, by offsetting you would only pay interest on €188,000.

PROS of an Offset Mortgage:

• You could save money on interest payments
• Potential to reduce your mortgage term
• It is a tax efficient way to use your savings. Because you don't actually receive interest on your savings, you don't pay DIRT tax on them.

CONS of an Offset Mortgage:

• You earn no interest on your savings
• You have to have your current and savings account with your mortgage lender.
• There are a limited number of lenders offering offset mortgages in Ireland.
• Less attractive in a low rate environment
  

Who does an Offset Mortgage suit?

• They are suitable for people who are good at controlling their finances.
  

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