Offset mortgage rates have plummeted in recent years, comparing favourably with those of standard products’ rates, says Moneyfacts.

Today, the average two-year fixed rate across all LTVs for an offset mortgage stands at 1.90 per cent. This compares to a standard two-year fix average of 2.11 per cent.

Meanwhile, the average five-year fixed rate across all LVs for an offset mortgage is 1.96 per cent as compared to a standard 2.37 per cent.

In April 219, the average for a two-year fixed rate offset mortgage stood at 2.10 per cent, while for the five-year, 2.35 per cent.

Rates have fallen despite a significant fall in the number of products available. In April 2019 there were 210 offset products to choose from. Today this number stands at 95.

Moneyfacts finance expert Eleanor Williams says: “Traditionally, offset mortgage rates were significantly higher than their standard counterparts, but this no longer seems to necessarily be the case.

“With rate margins so low, mortgage providers are keen to show that they offer a diverse range of products to appeal to as many borrowers as possible. While the number of offset deals available has reduced over the last 12 months, the rates themselves now seem to be keeping pace with the competition we have seen across the wider, mainstream mortgage market.

“Once on the property ladder, the main aim for many is to pay their mortgage balance off as quickly as possible. As a general rule, if a borrowers mortgage rate is higher than the interest rate they are currently earning on their savings, then they may find that they can save more by repaying their mortgage than they would receive in savings interest, particularly if they pay tax on the latter.

“Those who think they may benefit from an offset mortgage deal should consider their next steps carefully. Seeking independent financial advice could be invaluable in ensuring they select the right option for their circumstances.”