Is offset the option for you?

It has also been predicted that by 2009 such home loan products will account for around 30 per cent of total mortgage lending, estimated to be worth almost £85 billion.

At the beginning of 2006, Intelligent Finance revealed that a third of those people looking for a mortgage could benefit from an offset option.

Managing Director, Mark Parker, said: “The industry’s belief in offset is clearly demonstrated by the fact there were only a handful or lenders offering this type of product when Intelligent Finance launched in 2000.

“Our own research illustrates that one in three people can be better off in offset: it is just a matter of time until the market grows to this size.”

To qualify for an offset mortgage, borrowers will already have accumulated savings. This acts to reduce their overall mortgage debt, amount of interest payable and even the mortgage term.

There is no guide to exactly how much borrowers should have saved, but usually it is set at 10 per cent.

Although, Intelligent Finance have shown that in some cases customers need just eight per cent of their mortgage balance in savings.

This type of mortgage benefits higher earners who have built up a greater level of savings, but for those with no, or little, savings a flexible mortgage would be a better option.

There are many options available, but the offset mortgage is not suitable for everyone. Intelligent Finance urges borrowers to seek advice from a professional before deciding on which mortgage type suits their circumstances the best.