The idea of an offset mortgage seems enticing as you will be able to clear off your mortgage quicker than you thought. However, this might not always be the case and it just might end up proving rather detrimental for you. There are some typical scenarios in which an offset mortgage should be avoided.

Firstly, if your credit score is poor, then the offset mortgage rate will be high and you will have no real benefit apart from cutting down on taxes. This comes at the cost of a flexible savings account which will end up proving futile as it is always good to have cash at your disposal.

The next situation is if you have a small mortgage to pay off. It might seem like a good idea to get rid of it but then you might incur some surcharge and it is best to continue your monthly payments. The overall benefit might not be that significant at all.

On the whole an offset mortgage is fruitful but it needs to be handled with care to ensure that you get the best possible deal and avoid the situations above. There is nothing wrong in discussing with your lender about your possibilities and work out a compromise solution.