An offset mortgage has a linked savings or current account and rather than receiving interest on money paid into that account you don’t pay interest on the same balance of your mortgage.
You can normally set an offset facility to work in two ways. It can act as an over payment reducing your mortgage term or you can opt to make it reduce your monthly payment instead.
The main benefit of using an offset account against over paying your mortgage is the fact that you can readily access the funds in the future without having to refinance although this would affect your payments or term.
You can also use it to borrow money in advance but only pay for it when you take the money out of the offset account although again you need to consider how borrowing extra money will effect interest rates, loan to value and arrangement fees too.
Offset isn’t really a type of product so you can still get all the normal types of rates with an offset facility such as fixed, discount and tracker deals for example.
The main thing with any mortgage is to make sure any additional cost you have to pay in order to get this option will be justified by the benefits you receive and that is something we can consider for you in the advice process. You can get more information or to get expert advice on offset here