Offset Mortgage Calculator
See how linked savings reduce mortgage interest — without giving up access to the cash.
Cash held in linked offset account.
Offsetting £0 savings against a £0 UK mortgage at 0% saves around £0 in interest over the term — while keeping the savings accessible.
When an offset wins
Tax-efficient saving
Interest saved on a mortgage isn't taxed. Interest earned on savings is (for higher-rate taxpayers, at 40%). Offsetting is equivalent to earning your mortgage rate tax-free on the linked balance.
When it doesn't
If you keep less than ~£20k in cash, the rate premium of an offset product usually outweighs the saving. Basic-rate taxpayers also benefit less — ordinary savings interest is taxed lightly.
Frequently asked questions
How does an offset mortgage work?
Your linked savings reduce the mortgage balance that interest is charged on. £50k savings against a £250k mortgage means you pay interest on only £200k — but keep full access to the £50k.
Is an offset mortgage worth it?
Usually yes for higher-rate taxpayers with healthy cash. You save mortgage interest tax-free, while equivalent savings would be taxed at 40%. Break-even depends on how much cash you keep.
Which UK lenders offer offset mortgages?
Only a handful: Barclays, First Direct, Scottish Widows, Clydesdale, plus some specialists. The market is smaller than standard mortgages.
Are offset rates higher than standard?
Typically yes, by 0.2–0.6%. The tax-efficiency and flexibility usually outweigh it for higher-rate taxpayers with £50k+ savings.
Can I still access my linked savings?
Yes — that's the point. Money stays in your savings account, accessible at any time. If you withdraw, your interest saving reduces accordingly.
Reviewed by the Mortgage118 editorial team. Tax advantage shown is illustrative at the higher-rate (40%) band. This calculator provides an estimate only and does not constitute mortgage or tax advice.