A recent survey revealed that 40% of homeowners do not understand the basic idea of an offset mortgage and a further 35% only roughly know how they work.

This worrying trend highlights how consumers may be missing out on saving money and reducing the term of their mortgage, with just two in ten (21%) seeing offsets as a way they can save money on their mortgage.

Findings from the study show that swapping to an offset mortgage could cut down the length of a £100,000 25 year mortgage by four years and could save £24,232 in interest payments over the lifetime of the mortgage.

Pointing to the lack of awareness in the benefits of this type of mortgage, Jimmy Kelly, Head of Mortgages at the group, said: "It’s a real worry that consumers are not aware of the benefits of an offset mortgage.

"Not many people know, for example, that our market leading fee free offset tracker would have the equivalent savings rate of 5.10% for higher earners."