Offset calculator
Get a better understanding of the potential savings that your client(s) could make by offsetting their savings against their mortgage. To tailor the results to your clients circumstances move the sliders below.
Interest
With an Offset account, mortgage interest is only calculated on the difference between the two balances.
Tax
By offsetting their mortgage your clients savings become tax efficient. Find out how much tax your client could be saving.
Based on the information provided, an illustration of the possible benefits of offsetting:
Please note
The calculations used in this demonstrator are based on the following:
- The estimates provided are for illustration purposes only and assume that the interest rate will remain the same throughout the term of the mortgage
- Actual mortgage rates available are dependent on market conditions so change from time to time.
- Requires a static (i.e. fixed) payment to be set up and maintained throughout the mortgage term.
- Mortgage type is repayment.
- No interest is payable on the Offset savings balance.
- Regular monthly savings deposits are made throughout the mortgage term (in line with the 'Monthly Savings Deposit' entered), or a constant savings balance is maintained (in line with the 'Current Savings Balance' entered).
- The tax saving shown is based on the reduced term at which you could pay off your mortgage using your accumulated Offset savings. The example used on this page assumes that basic rate taxpayers pay 20% tax, higher rate taxpayers pay 40% tax and additional rate taxpayers pay 45% tax on savings interest and are based on current HM Revenue & Customs rules which are subject to change.
- *AER stands for Annual Equivalent Rate and shows you what the interest rate would be if interest was paid and added each year. This will enable you to compare more easily the return you can expect from your savings over time.