Offset Mortgage Calculator

Welcome to our offset mortgage calculator. At the top of this page, you will find a free calculator tool that can tell you how much an offset mortgage will cost compared to your current mortgage, or compared to a standard repayment mortgage if you don’t yet have one.

This simple offset mortgage calculator, which can be helpful when considering whether an offset mortgage might be the right option for you. However, reach out once you’ve crunched the numbers for more tailored advice from one of our offset mortgage specialists.

What our Offset calculator can tell you

Our offset mortgage calculator can do much more than simply calculate offset mortgage repayments. With minimal input from you, it can provide a detailed overview of how an offset mortgage compares with a standard repayment mortgage, based on your individual savings and future saving plans.

Simply enter the following details:

• Your current outstanding mortgage loan (or prospective loan size)

• Your chosen or remaining mortgage term

• Your current (or projected) mortgage interest rate

• Initial offset savings (how much you currently hold in the account you plan to link to an offset mortgage)

• Whether you have a capital repayment or interest-only mortgage

• How much you plan to add to your savings monthly (this can be left blank if you don’t plan to increase your savings)

The results will then show you:

• How much of an interest saving you would make over the full loan term with an offset mortgage

• How much sooner this would allow you to repay your mortgage

• A full side-by-side breakdown of your monthly repayments, interest payable, loan term and total mortgage cost over the term

• A full savings summary

• A year-by-year savings vs. mortgage balance graph, which displays the crossover point at which you could use your offset savings to repay your remaining mortgage loan, rather than continuing to pay interest

How this calculator works

If you take out an offset mortgage, your savings are held in an account linked to your mortgage. Interest is only charged on the difference between your mortgage balance and your savings.

For example: If you have a £300,000 mortgage with £50,000 in the linked savings account, you only pay interest on £250,000 of your mortgage balance.

If you continue to add monthly savings contributions regularly to your offset savings account, this will increase the offset balance. This further reduces the interest charged on your mortgage. If you have a repayment mortgage, this means more of each of your monthly payments goes towards clearing the mortgage balance, as less is paid towards interest charges.

Our offset mortgage calculator uses a standard mortgage calculation, so we use the full loan amount to calculate interest, giving you a clear picture of how much the offset would save you. However, please keep in mind that these figures are estimates.

Please note: Your actual savings will depend on your lender's specific offset mortgage terms and conditions.

Why use our Offset mortgage calculator?

Unlike a standard mortgage repayment calculator, our offset calculator shows how much you could potentially save using your savings to reduce mortgage interest. It also goes further than that, as described above, to help you make an informed decision about whether your savings would be put to best use in an offset account.

This kind of offset mortgage calculation can be instrumental in making a decision about the right type of mortgage or remortgage for you. However, we can also provide bespoke advice tailored to your exact circumstances, which will give you a more accurate representation of what offsetting would mean for you.

See how much sooner you could be mortgage free

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Example calculations

When it comes to offsetting your savings against your mortgage interest, our calculator can provide a good comparison between how an offset mortgage would look vs. a non-offset mortgage. However, in order to see how much different savings balances would impact your savings, you’d need to do multiple calculations.

The below tables show how much different savings balances in an offset account can impact your interest savings over the mortgage term - It assumes you are borrowing £250,000 over 25 years at a 4.5% interest rate:

This table shows how much your savings would increase and your mortgage term would increase depending on how much you added to your savings per month. It assumes you are borrowing £250,000 over 25 years at a 4.5% interest rate, and that your initial savings balance is £20,000.

Why choose Money Helpdesk for your mortgage needs?

At Money Helpdesk, once you’ve seen how much a typical offset mortgage could save you using the calculator above, our brokers can help you to compare the latest offset mortgage rates for free.

Whether you’re considering an offset mortgage for yourself, or to help a family member to buy their first home, we can provide expert advice to help you choose the most suitable product to maximise your savings.

Done your calculations? Then get started here for a free, no-obligation chat with an offset mortgage expert today.