Mainstream mortgage borrowers can now save themselves thousands of pounds with providers opening up the market for cheap offset mortgages, according to experts.

Offset mortgages work by deducting any savings or current account funds from the overall cost of the mortgage loan. Interest is only paid on the final balance, which potentially means that homeowners can pay off their mortgage more quickly.

So, someone with a £100,000 mortgage, £9,000 in savings, and an average of £1,000 in their current account, would have a mortgage debt of £90,000.

New products such as introductory rates of less than five per cent and ongoing rates within a point of base rates have made offset mortgages more affordable for more homeowners.

Ray Boulger, senior technical manager at mortgage broker John Charcol said: "The concept of offsetting is brilliant but until now has always come at too high a price to be good value for most borrowers."

"Offsetting is la creme de la creme of flexible mortgages, combining full flexibility with maximum convenience. Getting maximum value from offsetting is about convenience of using the facilities as well as a market leading rate."

However, there are disadvantages to the scheme as linked savings and current accounts do not gather their own interest and some people might find it more profitable to plump for a market-leading mortgage coupled with a market-leading savings account.

This also gives the borrower the option to transfer their savings or mortgage to another provider without any additional complications.