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I’m self employed, looking for a mortgage and have to save regularly for my tax bills – is there a better use for this money while it is waiting to be used?

You may wish to consider an offset mortgage.  Offset mortgages allow you to keep a pot of money alongside your mortgage account which you can withdraw from when you need to pay your tax bill.

The advantage over a normal savings account is that you won’t be charged interest on the part of your mortgage equivalent of the amount you have in your savings pot. You won’t receive any interest on the money in the savings pot but you’re saving interest at the rate on the mortgage, which is usually higher than you’d earn on a savings account.

The other advantage of having an offset account is that you do not pay tax on the interest saved by the offset funds.

Offset funds can normally be used to either reduce your mortgage term overall or reduce your monthly mortgage payment.  It really depends on the lender and the choices they offer.

Family Building Society
Ebbisham House
30 Church Street
Surrey KT17 4NL
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