Home
Back
Offset Mortgage Formula:
| From: | To: |
The Offset Mortgage Calculator Coventry calculates interest for offset mortgages using the formula: Interest = (Loan - Savings) × Rate. This calculator is specifically designed according to Coventry's offset mortgage guidelines.
The calculator uses the offset mortgage formula:
Where:
Explanation: The offset mortgage allows your savings to reduce the amount of mortgage interest you pay. Your savings are offset against your mortgage balance, so you only pay interest on the difference.
Details: Accurate offset mortgage calculation helps homeowners understand how much they can save on interest payments by maintaining savings that offset their mortgage balance, potentially reducing the loan term and total interest paid.
Tips: Enter the total loan amount in dollars, your offset savings amount in dollars, and the annual interest rate as a percentage. All values must be non-negative numbers.
Q1: What is an offset mortgage?
A: An offset mortgage links your mortgage to your savings account. Your savings balance is offset against your mortgage debt, so you only pay interest on the difference.
Q2: How does offset mortgage save money?
A: By reducing the effective mortgage balance on which interest is calculated, offset mortgages can significantly reduce the total interest paid over the life of the loan.
Q3: Are there any restrictions on savings access?
A: Typically, you can access your savings at any time, but doing so will reduce the offset benefit and increase your interest payments.
Q4: Is this calculator specific to Coventry?
A: Yes, this calculator follows Coventry's specific offset mortgage calculation methodology and formula.
Q5: Can I use this for other mortgage types?
A: This calculator is specifically designed for offset mortgages. Other mortgage types may require different calculation methods.