The principle is simple: most mortgage borrowers also have savings, even if they are small, and using this money to cancel out mortgage debt makes sense. Savers avoid paying tax on interest that their deposits would otherwise have earned. And because offset mortgage lenders calculate interest daily, every pound on deposit works hard to reduce the cost of borrowing.

Not to mention the fact that in a low interest rate environment, any savings you have are effectively earning interest at a higher rate than most mainstream savings accounts will pay.

By overpaying their mortgage by £3 a day, offset mortgage holders could save thousands of pounds in interest and even pay off their mortgage three and a half years early, new research suggests.

Abbey says that by overpaying an offset mortgage with the price of a tube ticket a day, offset mortgage holders can save £22,000 in interest.

Overpayments on mortgages average £500 a month, the mortgage lender found.

Offset mortgages are popular because it allows flexibility to mortgage borrowers whose income varies from one month to the next, according to Abbey.