I have an offset mortgage with First Direct where my accounts are all kept separate but the interest is calculated daily on the combined totals, and it is the best thing I've ever done with a mortgage.

Previously, I got only a little interest on my savings and the taxman took 40% of it from me.

Now I don't get any interest, but I don't pay interest on the amount of my mortgage equivalent to the value of my savings, and that is worth more than the GROSS savings interest would have been.

Also, the spare money in my current account is counted towards the mortgage interest on a daily basis, and even having a few days between payday and the Direct Debits going out adds up to a small advantage.

As said though, it's only worthwhile if you have savings or money coming in and not going out for a while (like VAT or self-employed tax!)