Offset Mortgage

Some lenders offer this type of mortgage product - it is sometimes also called a current account mortgage. This is a type of annuity mortgage that combines a variable interest rate mortgage with a current account.
Your salary is paid into your current account and you can deposit and withdraw money as normal. You pay your standard monthly repayment into your mortgage, and you can also pay in extra amounts or lump sums as you wish.
If your current account is in credit, you will be charged mortgage interest on the difference between the balance on your mortgage and the balance in your current account. In other words the money in your current account reduces the amount of interest due.
This allows you to pay off your mortgage quicker and save money because you pay off the interest on your mortgage sooner than with other mortgages.