A mortgage and a cash balance, and what to do with it
If you're holding cash alongside your mortgage, whether it's tax money waiting to leave on a fixed date or savings built up before a remortgage, this sets out how to work out where it should sit.
Use the Offset, overpay or save tool Read how offsetting worksWhat this works out for you
Money that has to wait
A homeowner holding cash alongside a mortgage usually isn't sitting on savings they don't need. Often it's money with a date already attached to it: a tax bill due in January, a payment on account due in July, a sum set aside because it has to leave the account on a particular day. Where that money sits in the meantime, offsetting the mortgage, paying it down, or sitting in a savings account, changes what it earns and what, if anything, gets taxed.
Working it out on your own figures
The calculator takes the numbers specific to you: the mortgage balance, the term left, the offset deal's rate and fee, the same lender's equivalent rate without the offset feature, the cash you hold, the savings rate available to you, your tax band, and any amount that has a fixed date to leave.
Start by reading the guide to offset, overpay or save to understand each strategy, then enter your figures into the calculator to compare them side by side.
It returns offsetting, overpaying and saving side by side, in pounds, over the period you give it. Each result states what happens to your access to the cash if you choose it, because that's often as important as the interest.
A calculator works from the figures it's given and the rules built into it. It can be wrong if a figure is wrong, if a rate moves, or if your own mortgage terms differ from what's assumed. The result is a starting point for your own checking, not a conclusion to act on without reading your mortgage terms.
Where it stops
Nothing here recommends a lender, a product or a broker. Nothing entered into the calculator is stored or sent anywhere; the working happens in your browser and stays there. Where a decision turns on circumstances particular to you, that's a conversation for a qualified independent mortgage adviser or a tax professional, not a page on a website.
Three figures, side by side
Offsetting, overpaying and saving are worked out on the numbers you enter.
Nothing submitted
The calculation runs in your browser. What you type in isn't stored or sent anywhere.
Sourcing, funding and regulatory status
Where the figures and the law come from
A tax rate, an allowance or a legal reference only carries weight if you can check where it came from. Each one here traces to GOV.UK or to legislation.gov.uk, with the date it was read set out beside it. The treatment of offset cash rests on ITTOIA 2005 s369, which charges income tax on interest received, and the absence of any HMRC page dealing with offset mortgages directly is stated. Savings tax rates for the 2027-28 tax year are cited to Finance Act 2026 s5, as rates that take effect in that year. Deposit protection figures and lender terms are each read on a stated date too, because a lender's own wording on withdrawals and minimum balances can shift an answer as much as the headline protection limit does.
Tax years change and allowances move, so a rate read today can be superseded before the next one is read. The date beside each figure is there so it can be checked against the current version on GOV.UK or legislation.gov.uk.
What the calculator can get wrong
The three-way calculator works through the figures you type in, and it can only be as right as those figures and the rate you've read for your own deal. A figure copied wrong, a rate that's moved since you checked it, or a mortgage term that doesn't match what's actually in your contract will still produce a result that looks exact. It's worth checking your inputs against your mortgage offer before deciding anything on the strength of it.
No lender pays to appear here
No lender pays for a mention, a higher position in a list, or a link that earns a commission when it's clicked. The list of lenders offering offset mortgages is set out without ranking, and carries no rates, fees or paid placements.
Where to go for advice on your own circumstances
This site is not authorised or regulated by the Financial Conduct Authority, and it doesn't arrange, advise on or introduce any mortgage, savings account or other financial product. Nothing on it is financial, mortgage or tax advice. Where a decision depends on your full circumstances, a qualified independent mortgage adviser or a tax professional is the right person to check it with.