Current Account Mortgage - worth it?

[RainyDay]

I noticed very early on that our monthly repayment remained constant despite our increased savings. I asked three times how offsetting worked, and I was left with the view that the mortgage interest portion reduces, the capital repayment portion increases and thus the period of the mortgage shortens. But no-one seemed very convincing.

I didn't think that they would adjust your repayments each month. I thought that your repayments would remain constant, but any credit balances which you have in the offset account would reduce the interest being charged to your account. In the long run, this would reduce the term of your mortgage, or allow you to arrange to reduce the repayments from time to time. But I don't think they reduce automatically.

 

[chippengael]

I didn't think that they would adjust your repayments each month. I thought that your repayments would remain constant, but any credit balances which you have in the offset account would reduce the interest being charged to your account. In the long run, this would reduce the term of your mortgage, or allow you to arrange to reduce the repayments from time to time. But I don't think they reduce automatically.

I agree. That's what they told me eventually. My original understanding was incorrect. However, the mortgage agent at the bank didn't really understand how they worked either!