Managing self-employment as a barrister can feel like juggling many spinning plates, chasing fees, managing active cases, and staying ahead of tax liabilities. Income rarely arrives in predictable patterns, making financial planning feel more like risk management than budgeting. With chambers deductions, VAT quarters, and self-assessment deadlines all demanding attention, it’s no wonder that navigating cash flow, building reserves, and planning for the future often feels complex and constant. In this world, clarity and flexibility aren’t just helpful; they’re essential.
That’s where an offset mortgage comes in, a product that, when used well, aligns perfectly with the finances of a barrister.
An offset mortgage links your mortgage to a savings account. Instead of earning interest on your savings, the money in those accounts is offset against your mortgage balance, meaning you only pay interest on the difference. So, if you have a £500,000 mortgage and £100,000 sitting in your offset account, you’re only charged interest on £400,000.
With an offset mortgage, you have two powerful choices: reduce your monthly payments or reduce the overall term of your mortgage. If you choose to lower the monthly payments, the money held in your offset account reduces the interest charged each month, meaning more manageable outgoings, ideal for smoothing cash flow during quieter periods.
Alternatively, by keeping your payments at the standard level while offsetting a portion of the loan, you reduce the amount of interest over time and pay off the capital faster, effectively shortening the mortgage term.
Both approaches offer flexibility; it’s simply a matter of whether immediate affordability or long-term efficiency matters more to you.
Interest earned on savings is taxable. But with an offset mortgage, you’re not technically earning interest; you’re saving it. That means you’re reducing your mortgage costs without increasing your tax liability. For higher-rate taxpayers, the benefit is even more pronounced.
Barristers are known for their irregular income patterns. One month you might bring in £20,000, the next £2,000. An offset mortgage gives you a safe place to park excess income during strong months, lowering your interest bill while keeping those funds accessible when needed. It creates a buffer that works in your favour.
Need to set aside money for tax? General Expenses? Property works? Keep it in your offset account. You’ll have instant access when needed, but until then, it’s working to reduce your mortgage interest. It’s like putting your tax reserve to work — without taking any risk.
Unlike overpaying a traditional mortgage, where it can be difficult or costly to access that money again, offset mortgages offer flexibility. Withdraw the funds when you need them, without penalty. That’s ideal for a profession where income can be strong one month and sporadic for the following months.
| Repayment Method | Amount in Offset | Monthly Payment | Explanation |
|---|---|---|---|
| Repayment | £500,000 | c.£2,924 | Standard capital + interest repayment on full balance |
| Repayment | £250,000 | c.£2,115 | Paying full capital, only paying interest on the remaining £250,000 after offset |
| Repayment | £0 | c.£1,667 | Paying capital only; interest fully offset |
| Interest-Only | £0 | c.£2,083 | Only paying interest on full balance |
| Interest-Only | £250,000 | c.£1,042 | Only paying interest on the remaining £250,000 after offset |
| Interest-Only | £500,000 | 0 | No interest due |
Offset mortgages sometimes carry a slightly higher interest rate than traditional deals, so they work best when you’re holding a meaningful amount of savings or cash reserves. If your accounts regularly run close to zero, you may be better off with a standard deal and making occasional overpayments.
But for many barristers, particularly those early in tenancy, those with family support, or those building a reserve for tax, an offset mortgage offers the ultimate blend of liquidity, flexibility, and long-term efficiency.
At Henry Dannell, we specialise in working with self-employed professionals, and few are more uniquely structured than barristers. We’ll help you:
An offset mortgage can act as a safe, ring-fenced place to hold your tax money, keeping it readily accessible when needed, while quietly reducing your mortgage interest in the meantime.
Get in touch to discuss.
Please note: A mortgage is secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Mortgage deals may not be available, and lending is subject to individual circumstances and status.