An offset mortgage can also be referred to as a savings account mortgage - because the balance of your savings account when positive is offset against the outstanding balance of your mortgage.

This means that you do not accrue interest on the balance of your savings account but do not pay interest on the same amount of your mortgage at a set rate. In this way an offset mortgage can help you make a saving on your home loan.

In the last few years interest rates haven't provided very good returns on stocks, shares and investments, and Building Society savings accounts could see your interest taxed at either the basic or high rate.

If you hold money in a savings account it is possible that your savings could be ‘offset’ against your mortgage, which in turn could reduce the amount of interest payable on your outstanding mortgage. 

This means you could pay less over the life of the mortgage meaning either lower monthly mortgage payments or a shorter mortgage term.