The more money you have in your offset savings account the more your mortgage bill falls.
Of course, most do not have such levels of spare cash lying around. But the point here is about financial responsibility, restraint and control.
My generation is one which has grown entirely accustomed to cheap debt, following more than a decade of ultra-low interest rates in the wake of the financial crisis. It is in stark contrast to those who experienced rates as high as 17pc during the late 1980s.
This cheap borrowing has helped to push up property prices far out of kilter with wage inflation. To keep up, would-be homeowners have been encouraged to borrow as much as possible, over-extending themselves on fixed-rate deals, on top of cheap car finance for luxury vehicles.
They now face a reckoning. Clearly something has to change.
With the benefit of hindsight, it is clear to see that restraint – resisting the urge to put all your eggs in one basket – would eventually be met with reward. I was advised to stretch my borrowing as far as possible – I’m incredibly glad I didn’t.
Now mortgage rates have reverted close to their long-term averages, and savings rates have improved with them, restoring our personal cash reserves. Regaining control over our own money is the best way to unchain ourselves from the calamitous risks of overborrowing.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
