Offset keeps the cash linked rather than paid in permanently
That is the main structural difference from a standard overpayment. Your cash may remain accessible in the linked account while still reducing the balance charged for interest.
Offset Mortgage Calculator
Offset mortgage calculator for savings-versus-debt comparisons
Compare an offset deal with linked savings against a standard mortgage with the same cash held separately over the window you choose.
Offset vs separate savingsNo guessed rate premiumNet debt kept visible
Offset Rule
Interest is charged on the mortgage balance minus linked savings
Savings Warning
Linked offset savings usually do not earn separate savings interest
Comparison Scope
Use the actual offset and standard quotes you have, not a guessed premium
On This Page
Calculator
Compare offset against separate savings over the period you can judge honestly
This planner compares one entered offset route with one entered standard mortgage route over the selected window. It keeps the savings balance, mortgage interest and net debt visible together so the result is not reduced to a single monthly-payment headline.
Comparison Inputs
£
£
%
Use the actual non-offset quote you want to compare.
%
Enter the actual offset quote rather than assuming a fixed premium.
years
years
Use the next 2 years or 5 years if that matches the deal period you are actually comparing.
%
Use your net rate after tax, or your ISA rate, for the cleanest like-for-like comparison.
Assumptions Used
This planner assumes the linked savings balance stays in place for the selected window and the entered rates stay unchanged for that same period. It compares the window you select, not a guessed full market cycle.
Standard Mortgage Plus Separate Savings
Monthly Mortgage Payment
£1,425.29Mortgage Interest During 2 years
£23,260Mortgage Balance After 2 years
£239,053Savings Balance After 2 years
£32,365Net Debt After Window
£206,688Offset Mortgage
Monthly Mortgage Payment
£1,454.20Mortgage Interest During 2 years
£21,138Mortgage Balance After 2 years
£236,238Linked Savings Still Available
£30,000Linked offset savings usually do not earn separate savings interest while they are offsetting the mortgage.
Net Debt After Window
£206,238Comparison Summary
Monthly Payment Difference
+£28.91Positive means the offset deal has the higher contractual monthly payment on the rates entered.
Mortgage Interest Difference Over 2 years
+£2,122Positive means the offset route cuts mortgage interest during the selected window.
Net Debt Difference After 2 years
+£450Positive means the offset route leaves you with lower net debt after allowing for the separate savings balance.
Illustrative Time Saving If Savings Stayed Linked
3 years 5 monthsThis full-term view is illustrative only and assumes the same linked savings balance and offset rate stay in place.
How to read the result
It compares one entered standard mortgage route with one entered offset route over the selected window. It does not fetch live lender rates, predict future savings rates, or assume your linked savings balance will stay untouched forever unless you explicitly use the illustrative full-term note above.
Interpretation
How offset differs from overpaying or just holding cash separately
These three routes solve different problems, so compare them separately rather than forcing everything into one generic 'worth it' answer.
Separate savings may earn interest instead
Linked offset savings usually do not earn separate savings interest, so the fair comparison is not just mortgage interest saved but the savings interest you could have earned elsewhere.
Net debt after the selected window matters more than a rate slogan
A slightly higher offset rate can still be worth testing if the linked savings materially reduce interest. Equally, a higher rate can make the offset route weaker if the linked cash is small or unlikely to stay in place.
Decision Checks
Questions worth answering before you call an offset deal worthwhile
Focus on the checks you can actually perform: linked savings balance, rate difference, access to cash and the way the two structures fit your own finances.
How much cash will really stay linked for the whole comparison window?
Offset works best when the linked savings stay put. If you expect that cash to be spent or moved, rerun the planner with a lower linked-savings balance rather than assuming the headline benefit will hold.
What is the actual rate gap between the standard and offset quotes?
Do not assume a universal offset premium. Enter the exact quotes you have and compare them over the same term and the same planning window.
Do you value access to cash more than a permanent balance reduction?
If you are comfortable reducing the mortgage permanently, compare this route with the overpayment planner next. If keeping a cash buffer matters, the linked-savings structure may still be useful even when the monthly payment is not the lowest.
Next Tools
Use these tools for the next mortgage decision
Once the offset comparison is clearer, these pages help with overpayments, remortgaging and wider deal choice.
Overpayment Planner
Compare regular or lump-sum overpayments with keeping the same money separate.
Mortgage Comparison Planner
Test the wider deal trade-off if you are comparing several mortgage quotes rather than only offset versus standard.
Remortgage Planner
Move on here if the offset decision is tied to a transfer or remortgage before your current deal ends.
Mortgage Deal Ending
Use the action-plan page if the bigger issue is an expiring fixed deal rather than offset strategy alone.
Frequently Asked Questions
What is an offset mortgage?
An offset mortgage links your mortgage to your savings account so you only pay interest on the difference between the mortgage balance and the linked savings balance. The linked savings usually do not earn separate savings interest while they are offsetting the mortgage.
Does this calculator prove an offset mortgage is better?
No. It compares one standard mortgage route with one offset route over the window you choose. It does not assume a standard offset-rate premium, a fixed tax band, or that your linked savings will remain untouched forever.
Is offset the same as overpaying?
No. Overpaying reduces the mortgage balance directly. An offset mortgage keeps the cash in a linked savings account instead, so the money may stay accessible while still reducing the balance charged for interest.
Why ask for a net savings rate?
That lets you compare the offset route with keeping the same cash in a separate savings account on a fairer basis. Use your net rate after tax, or your ISA rate, rather than an unrealistic headline rate you may not actually receive.
Why is the full-term time saving marked illustrative?
Because it assumes the same linked savings balance and the same mortgage rate stay in place until the loan is cleared. The main comparison is the planning window you choose.