Could An Offset Mortgage Help Uk Top Earners?

Could An Offset Mortgage Help Uk Top Earners?

Could An Offset Mortgage Help Uk Top Earners?

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Could An Offset Mortgage Help Uk Top Earners?

By: Amanda
Posted: Apr 09, 2010

New income tax for UK top earners is now in force

Higher rate income tax of 50% is now payable by those with incomes greater than £150,000 a year.

Not only are these UK top earners being hit by income tax changes but they are probably also being hit with the low returns currently paid on UK savings accounts as a result of the currently low Bank of England Base Rate.

Whilst there is no substitute for professional financial planning advice, for UK top earners who have both savings in the UK and a residential mortgage, there may be an extra something to consider.

Offset Mortgages

For some higher rate income tax payers it could be the ideal time to consider an offset mortgage.

To find out whether an offset mortgage is right for you and explore the best offset mortgages available it is advisable to talk to an experienced mortgage broker.

Mortgage Offset rates vary and the effectiveness of remortgaging onto an offset mortgage will depend not only on the rate but also on the amount of money held in savings which can be offset against the mortgage balance.

For UK top earners however, it is definitely something to consider.

How could an offset mortgage help?

Looking at an Offset mortgage in a very simplistic way, it usually links your mortgage with one or more savings accounts and sometimes a current account.

Linking your mortgage with these accounts means your savings are literally ‘offset’ against your mortgage balance, effectively reducing the amount on which mortgage interest is charged.

For higher rate income tax payers who are struggling to obtain attractive or tax efficient returns on savings, offset mortgages are certainly worth looking at.

Is an offset mortgage for me?

An offset mortgage will not be right for everyone.  The savings that could be made will vary depending on the mortgage offset rate, the size of your mortgage debt and the amount you are able to hold in the associated savings account.

To find out whether an offset mortgage could work for you the first thing to do is to talk to an experienced, whole of market mortgage broker.

A qualified mortgage advisor will work with you to assess your circumstances, review your future plans and outline what options are currently available.

Working with a whole of market mortgage broker will allow you to decide whether remortgaging to an offset mortgage would be both possible and worth while for your personal circumstances.

As with many mortgages, remortgaging to an offset mortgage is likely to incur arrangement fees and these need to be factored in when deciding whether a remortgage is the right thing for you to do.

The main thing is, don’t just accept this income tax change without exploring ways you could recoup or at least reduce your loss.

Be proactive with your financial planning and talk to someone sooner rather than later.

Amanda – About the Author:

For full impartial whole of market mortgage advise including help deciding whether an offset mortgage is right for you, contact equate free on 0800 038 0098 or visit

Equate has a team of advisors who would be happy to look at your options and advise you whether a re-mortgage could save you some money.


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Article Tags:
uk top earners, higher rate income tax, income tax changes, mortgage offset rate, best offset mortgages, offset mortgage, mortgage broker, whole of market, re mortgage advice, remortgage advice

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