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Homeowners saving £29bn with offset mortgages

26/06/2007

Throughout the UK nearly 4 million people could save up to £29bn in income tax and interest, leaving a total average of £11000 per household, homeowners however must switch to an offset mortgage deal.

Yorkshire Bank found out that nearly a quarter of homeowners within the UK have their current account, savings and mortgage with the same building society or bank, however could save extensively if they took out an offset deal.

Homeowners are also potentially missing out on tax advantages. Better than making little amounts of interest on savings, offsetting mortgage debt enables customers to increase greater tax competence by successfully earning the mortgage interest rate. Cooperatively these homeowners could save £151million in tax over time, according to Yorkshire Bank's calculations.

Yorkshire Bank's head of retail, Gary Lumby commented:

"With the recent rises in the Bank of England's 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.

"The average homeowner 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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