According to a study from Yorkshire Bank, 29 per cent of homeowners in the UK have their savings, current account and mortgage all with the same bank or building society, but could be missing out on significant savings because they arent combined as an offset mortgage.
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Based on Yorkshire Banks calculations, by not combining their savings, current accounts and mortgages under one roof in an offset mortgage, homeowners are also potentially missing out on tax advantages.
Rather than earning small amounts of interest on savings, offsetting mortgage debt enables customers to gain greater tax efficiency by effectively earning the mortgage interest rate.
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Collectively, these homeowners could save up to £151 million in tax over the coming year alone.
Gary Lumby, Yorkshire Banks head of retail, said: The average homeowners who has their savings, current account and mortgage with the same bank but has not yet considered an offset mortgage could be missing out on a great opportunity.
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With the recent rises in the Bank of Englands Base, many offset mortgage homeowners can see the positive balances in their savings and current accounts working even harder to offset the mortgage interest. With built-in payment flexibility there is also an option to overpay or underpay.
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