Live at home students could save parents thousands of pounds

first direct has discovered that if parents with an offset mortgage get creative and encourage their child to stay at home whilst studying at university, typical homeowners could save over £10,500 in just 3 years, reduce their mortgage term by a year and shave £955 off interest costs.

The rise in maximum tuition fees to £9,000 per annum next year has been big news, but when a child goes off to University chances are parents will be forking out for their offspring's increasingly expensive accommodation as well. 

Recent research by Accommodation for Students revealed that the average student rent is £65 per week, an increase of 4.3% on this time last year.  first direct has worked out that over the next three years each child could cost their family a whopping £10,582 in rent alone meaning parents need to get creative in order to foot the bill.

How could an offset help? 

If parents encourage their offspring to stay at home they can plough the money they would have spent on student rent into their offset instead.  By making these overpayments on their offset for three years they would reduce the term of their mortgage by a year and save on interest too.

Also the Rent a Room scheme means there are no tax implications for letting a furnished room in your home up to the value of £4,250 per annum, so even offset mortgage holders without children on their way to University could take advantage of the need for student accommodation and pay off their mortgage sooner.

Richard Tolchard, Senior Mortgage Product Manager at first direct commented: "If your children are studying locally having them live at home is a real option and could save you over £10k in accommodation costs, though it might mean a bit more ironing!

"By ploughing what you save by no longer paying these costs into your offset instead, you could really make a dent in what you owe on your mortgage."

For further information, visit firstdirect.com.