Mortgage offset deals have fallen to record lows as lender competition intensifies, according to new research from Moneyfacts.co.uk.
The average offset fixed rate is now priced at 2.65%, down more than one percentage point from 3.68% two years ago.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said this should boost their appeal to savers who are looking for ways of making a better return on their money.
"With competition high in the mortgage market, providers are keen to show that they offer a diverse range of mortgages at great prices, and offset products only enhance their offerings further.
"Thanks to the record-low base rate, standard savings accounts currently offer poor returns, so many consumers are looking for better ways to use their cash savings. Offset mortgages can offer a genuine alternative."
Nelson said it makes sense for those with a mortgage to use their cash savings within an offset facility to pay off substantial sums on their mortgage and drive down the mortgage balance quickly.
"But, unlike overpayments, borrowers can access the cash whenever it is needed."
Nelson said one of the biggest criticisms of offset mortgages is that the rates tend to be higher than standard mortgages on the market.
"With rates reaching all-time lows, there has never been a better time for borrowers to grab themselves an offset deal."
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