Its research revealed that the estimated 460,000 offset mortgage borrowers in the UK made a total return of £1.9bn since 2009 compared to the £534m interest they would have made if they had invested in a savings account.
First Direct found that the average offset savings balance rose 19% compared to a 2.5% increase in the average gross loan balance, meaning that the average offset savings balance is 26% of the mortgage balance compared to 22% two years ago.
Its research suggests that a higher rate taxpayer could have made £2,960 more in savings in an offset account over the last two years than best buy savings accounts.
Richard Tolchard, senior mortgage product manager at First Direct, said: “An offset mortgage is an excellent option for those borrowers looking to benefit from a higher rate for their savings.
“While many UK savers are currently seeing the value of their savings eaten up by inflation as well as being taxed on the interest earned on these savings, no tax applies if they use their funds to reduce their mortgage balance.”
He added: “As well as helping them to pay down their outstanding loan, offsets can help shelter savers from the effects of high inflation on their hard earned savings pots.
“In the current interest rate environment mortgage borrowers could have saved thousands more with an offset in the last couple of years, even if they had diligently been seeking out the best buy savings rates.”
