Offset Mortgage
A more complex mortgage arrangement, where the lender can 'offset' your mortgage balance against any savings or deposits you have with them. You can opt to pay no interest on part of your mortgage, equal to the value of your savings on which you'll receive no interest. This means you could reduce the term of your loan, saving you interest, or you could reduce your monthly payment. This can be a more tax-efficient way of saving, especially for higher rate taxpayers, as the mortgage interest rate 'saved' is usually higher than the interest rate earned after tax on your savings.
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