An offset mortgage delivers a tax-free savings return by setting your savings and current account against your mortgage debt. As you only pay interest on the balance, the savings pot that you put in effectively earns a return equivalent to the mortgage rate.
When it comes to hunting down a good savings rate, it may sound surprising but your mortgage could help you out. For savers an offset mortgage can offer a good tax-free return that is hard to beat.
Currently, savers can only put a maximum of £20,000 per tax year into a cash ISA and if they withdraw the money it loses its tax-free status.
An offset mortgage also delivers the equivalent of a tax-free return but has no limits on how much a saver can put in, until they reach the full amount borrowed, and cash can be taken out and put back in.
But don’t rush to pull your savings out of ISAs, it’s important to do research and speak with an expert before making any decisions.