Heavily-marketed offset mortgages are nothing more than "fool's gold", according to experts at Bradford & Bingley's The MarketPlace.

Britain's biggest mortgage broker is warning of the dangers of buyers signing up to the rash of available deals. It says effective offsetting remains the privilege of the wealthy.

In an offset mortgage, interest from savings is used to offset interest payments due on a mortgage.

The B&B says such mortgages, which have been marketed "indiscriminately" as the answer to many borrowers' prayers, may leave people worse off than a traditional deal.

The company warns that householders who manage their money effectively would be better off opting for a mixture of market-leading mortgage and a high interest savings account.

The MarketPlace's head of product operations, David Bitner, said: "The offset market has continued to proliferate over the last 12 months with new and more competitive products arriving on the scene.

"However, these deals are still not right for the vast majority of borrowers who just do not have the savings to make them work.

"Higher rate taxpayers need at least 20 per cent in savings to make offsetting worthwhile, while basic taxpayers need a staggering 40 per cent."

Mr Bitner said that, in most cases, borrowers would be paying over the odds, especially in the long term. However, he did concede that some offset mortgages did provide flexibility allowing some borrowers to include current accounts, credit cards and loans.

He added: "People believe they need to take an offset to obtain this level of flexibility, but many mainstream deals offer much better rates with flexible features such as over-payments and payment holidays.

"Borrowers, especially if they are disciplined at looking around for the best deals, are much better off taking a market-leading product and going offset later in their mortgage life when they have the level of savings to make it work."

Mr Bitner concluded that, although offsets clearly did have a niche in the market, for most people they were not the answer.

"When people do reach the level of savings that are required to make them work, then they are worth considering," he said "However, until that point, borrowers are much better off managing their money and using competitive, traditional mortgage and savings accounts."