Offset mortgages are back in favour, according to the Council of Mortgage Lenders!

Last year we took out 170,000 offset mortgages, worth nearly £30bn which is a jump of 49% over the past year.

Experts say the increased popularity is due to them becoming more competitive when compared to fixed rate mortgages, as they allow you to offset savings and current account balances against your mortgage debt.

As they are flexible, they allow you to make over-payments and under-payments on the loan. Paying less interest can allow you to repay your mortgage debt sooner (which is surely a good thing?)

For example, if you had a mortgage debt of £100,000 and £10,000 in savings, you would only pay interest on £90,000 of the loan.

Offset mortgages originated in Australia (who would have thought?) and came to the UK in the mid 1990s and when introduced they initially proved popular as they were heavily marketed by banks and building societies.

However their popularity was undone by more competitive fixed-rate mortgage deals. With the recent (and seemingly never ending!) rises in interest rate, a lot of fixed-rate deals have become more expensive, which has led many of you switching back to offset mortgage deals.

So if you haven't switched back, maybe now is the time, as it looks like interest rates are set to go up again!

Are you a fixed rate borrower? Get set for higher repayments!