So the mortgage is up for renewal, the ‘mortgage shrinker’ on the Virgin one account is quite compelling and I have a bit of money to put into it. It seems very compelling but I assume they’ll be tracker based rather than fixed?

Seems too good to be true, but they do seem to make sense. Any drawbacks or anything I should be aware of? Was thinking of having some seperate cash ISA’s as well

Sometimes they have higher setup / valuation fees, or indeed a higher interest rate than a straight forward tracker.

Having said that, we’ve already shaved years off ours (and we’re only 3 years into it) by having an offset mortgage. Ours it with Barclays / Woolwich and all our current accounts and savings accounts are linked up to the mortgage so no matter how we divide up our savings to help us understand what we’ve got it’s all offset against the mortgage.

So, if you are likely to have a decent amount of savings building up and have the mortgage for a while (to offset any higher fees) they are a winner in my book.

I have a Woolwich one too, they’re not really for everyone but if you’re like me – quite lazy with excess cash every now and then these accounts can make sense; better for higher rate tax payers. Mine was an easy option as I got a good rate – 0.49% above base rate.

I have a fixed rate one with First Direct and the set up fees weren’t any different from non-offset ones (although looking around I think we were just lucky at the time).

I’m managing to save a third of the monthly interest on my mortgage at the mo; not because I’m rich and have loads of savings against it but just from current account money and using 0% interest rate credit cards. We use the credit card for our normal shopping and save the money in a different account just paying the minimum per month until the end of the interest free term and then just pay off the lump sum. In effect you save your mortgage interest rate against everything you buy, takes a bit of management but financially seems to be worth it for us.

A few years ago I sat down and spreadsheeted one against a ‘normal’ account.

IMO they’re not worth it, not enough of a saving to take into account the extra interest paid. Not sure now with how the interest rates (loans and savings) have changed.

But I’d suggest you do the sums, rather than trust a ‘salesman’.