Use this offset mortgage calculator to see how much interest and time you save by linking your savings to your mortgage. With an offset mortgage, you only pay interest on the balance minus your savings, while your savings stay available to use.
Your offset mortgage saving
- Monthly payment
- –
- Interest saved
- –
- Mortgage-free sooner by
- –
- Savings interest you give up (after tax)
- –
In the example, offsetting £30,000 of savings against a £200,000 mortgage at 4.7% over 25 years saves about £53,769 of interest and clears the mortgage 3 years 11 months early, if the monthly payment stays the same.
How to use the offset mortgage calculator
- Enter your mortgage balance, the offset rate and the term.
- Enter the savings you would keep in the linked account.
- Enter the savings rate you could get elsewhere and your tax rate on interest.
- Compare the interest saved with the savings interest you would give up.
How an offset mortgage works
Your savings and current account sit next to your mortgage. Instead of earning interest, they reduce the balance you are charged interest on. Most lenders keep your monthly payment the same, so more of each payment pays off the loan and you finish sooner.
Because you are not earning interest, there is no tax to pay on it. That makes offsetting especially good for higher rate taxpayers and anyone whose savings interest is above their Personal Savings Allowance.
Offset mortgage examples
| Savings offset | Interest saved | Mortgage-free sooner |
|---|---|---|
| £10,000 | £20,689 | 1 year 6 months |
| £20,000 | £38,441 | 2 years 9 months |
| £30,000 | £53,769 | 3 years 11 months |
| £50,000 | £78,626 | 5 years 9 months |
| £75,000 | £101,419 | 7 years 5 months |
In practice savings go up and down. The offset mortgage calculator assumes a steady balance, so treat the figures as a guide.
Offset vs saving vs overpaying
Offsetting saves the same interest as overpaying the same amount, but you can still take the money back. Overpaying usually comes with a slightly lower rate, because offset rates are often a little higher. Compare with the mortgage overpayment calculator. If a savings account pays more after tax than your mortgage rate, saving may be better, and the calculator tells you which wins.
Who offset mortgages suit
- Higher rate taxpayers with savings.
- Self-employed people saving for tax bills, which can sit in the offset account until January.
- Families whose relatives want to help by linking their savings.
- People who want flexibility rather than locking money into the mortgage.
Offset mortgage calculator: worked example
Chris is a higher rate taxpayer with a £200,000 mortgage at 4.7% and £30,000 of savings earning 4%. After 40% tax, the savings earn just 2.4%. By offsetting, Chris effectively earns 4.7% tax-free, saving about £53,769 over the term and finishing 3 years 11 months early, while the money stays available for emergencies. When the offset deal ends, compare it with standard deals using the remortgage calculator.
Frequently asked questions
Is an offset mortgage worth it?
Usually if you keep a large savings balance, especially as a higher rate taxpayer. If your savings are small, a cheaper standard mortgage may cost less.
Can I use the money in an offset account?
Yes. You can take it out at any time; your interest saving just goes down.
Do offset mortgages have higher rates?
Often slightly higher than the best standard deals. The offset mortgage calculator lets you test the offset rate against the alternative.
Can I reduce my payments instead?
Some lenders let you keep the term and pay less each month instead of finishing early.
About this calculator
This offset mortgage calculator works month by month, charging interest on the balance minus savings. Guidance was checked against MoneyHelper on 9 November 2026. Results are estimates.