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Offset mortgage calculator

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An offset mortgage lets you use your savings to ‘offset’ the interest payment on your mortgage. The more savings you have, the less interest you pay on your mortgage. Lenders look at the amount you have in your savings, and how much your outstanding mortgage balance is – and you only pay the interest on the difference between the two figures.

Dependent on the lender you take out the offset mortgage with, you can choose one of two options:

  • Use your savings to lower your monthly payments
  • Use your savings to reduce your overall mortgage term

Our offset mortgage calculator shows you the potential interest and tax savings you could make in both situations.

How much can I save?

Mortgage calculator

Mortgage balance graph


After 0 years 0 months your savings balance and your offset mortgage balance will be equal. The lender may offer for you to settle your mortgage balance early using your savings. Taking this option will reduce your term by 0 years 0 months.


After 0 years 0 months your offset mortgage balance will be £0. At this point, your mortgage term has concluded. By offsetting your savings, you reduced your term by 0 year 0 months and saved £0 in interest.


This is where your term ends if you opt for a standard mortgage.

Mortgage monthly payments graph

✅  You could reduce your mortgage term by 0 years 0 months with an offset mortgage

By offsetting your mortgage with your initial savings of £0 plus any subsequent savings, and opting to reduce your mortgage term, your monthly payments are unaffected. Your monthly mortgage payment of £0 will stay the same as a standard mortgage. The lender will instead reduce your mortgage balance by the interest saved and by your effective monthly overpayments. This will reduce your term by 0 years 0 months.

✅  You could save £0 in mortgage interest with an offset mortgage

Reducing your mortgage term will reduce the total amount of mortgage interest you pay by £0. There are two factors that contribute to this saving. First, the lender reduces your mortgage balance by the offset interest on your savings and current account. Second, since your monthly payments stay the same, you are in effect making monthly overpayments that further reduce your mortgage balance.

✅  You could save £0 in tax on your savings interest with an offset mortgage

Since you are not earning interest on savings linked to your offset mortgage, you won’t pay any tax on the offset balances; saving you up to £0 in tax.

Mortgage monthly payments graph


At the start of your mortgage, your monthly payment would be £0; offset saving of £0 this month.


After 0 years 0 months your savings balance and your offset mortgage balance will be equal. The lender may offer for you to settle your mortgage balance early using your savings. If you choose not to settle early and your offset mortgage is on repayments, your monthly payments will start to increase due to the increase in capital repayments to clear the mortgagee balance at full term of 0 years 0 months.


This is where the mortgage term ends with a closing mortgage balance of £0. Your offset savings to date are £0.

Mortgage balance graph

✅  You could save £0 on your monthly payments with an offset mortgage

With an offset mortgage, your mortgage interest liability reduces proportionally to your savings. Based on the calculator inputs, your starting offset savings of £0 will reduce your monthly payments down to a minimum £0, corresponding to a maximum saving of £0.

✅  You could save £0 in interest payments with an offset mortgage

With an offset mortgage, the lender only charges you interest on the difference between your mortgage balance and your savings and current account balance. Based on the calculator inputs, you could save £0 in interest payments over the life of the mortgage.

✅  You could save £0 in tax on your savings interest with an offset mortgage

Because you are not earning interest on savings linked to your offset mortgage, you won’t pay any tax on the offset balances; saving you up to £0 in tax.

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We offer independent mortgage advice across the whole market – not just what you can find on the high street.

  • Access to over 130 lenders
  • Choice of over 20,000 deals

All this means we’ll always guarantee to find you the best offset mortgage deal available.

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We work around your busy life to make getting a mortgage as easy as possible.

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You don’t need to faff with the Post Office queue either:

  • Upload all your documents using our 24/7 online upload tool.

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We’re experts on lender criteria:

  • We’ll research and recommend only the most suitable options for you.
  • We’ll also complete all the paperwork for you, to make sure your mortgage application is successful.

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We don’t think you should waste time filling out forms that aren’t relevant to your mortgage needs.

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    Offset mortgage calculator extras

    With an offset mortgage, the lender will take your savings into account when working out the interest part of your monthly mortgage payment. Your savings balance is offset against your mortgage balance and you are only charged interest on the difference between the two. This reduced interest liability can either reduce your monthly payments or shorten your mortgage term. This offset calculator will help you get an idea of the potential interest savings that come with an offset mortgage.

    With the current low savings rates offered by high street banks compared to mortgage interest rates, your savings may work better for you if offset against you mortgage. The interest you save with an offset mortgage is worked out at the mortgage rate rather than the lower savings rate.

    You could use your savings towards a bigger deposit or towards overpayments if you opt for a normal mortgage. Doing this, however, takes away your option to access the money if the need arises in the future. With an offset mortgage, you could have instant access to your savings. Any money you withdraw simply reduces your savings balance and thus reduces the interest you save.

    As opposed to keeping your savings in a savings account, you don’t earn interest on savings linked to your offset mortgage. Consequently, you are not liable for any income tax from earned interest.

    • Not all lenders offer offset mortgages. Therefore, choosing an offset mortgage will reduce the number of deals available to you and in some cases, an offset deal may not be possible at all.
    • Lenders sometimes charge higher mortgage rates for offset mortgages than they do for their normal mortgages.
    • The spread between mortgage rates and savings rates has been narrowing recently, so you may be better off keeping your savings separate from your mortgage.
    • Your level of earnings will decide the tax savings on the forfeited interest from the savings that you link to your offset mortgage. You may be better off with a standard mortgage if you are in a low tax bracket and with little savings. On the other hand, you may benefit more from an offset mortgage, if you are a higher rate tax payer with considerable savings.

    Our offset mortgage calculator makes a few assumptions to work out the different figures on display. We assume that your savings interest rate, mortgage interest rate and tax band stay the same for the duration of the mortgage.

    Our expert mortgage advisors are on hand to go over your options and confirm whether an offset mortgage is the best way to go in your case.

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