Mortgage Industry News

← Back

Offset alternative to "cheap mortgages"

Date: Mon, 06 Mar 2006

Offset mortgages could offer many homebuyers a viable alternative to standard cheap mortgage deals.

Offset loans, first developed in the Australian housing market, allow borrowers to link their main savings or current account to their mortgage account and means that interest calculations "offset" the amount held in these accounts against the outstanding balance. Savers are also able to avoid paying tax on interest that their deposits would have earned.

This form of mortgage is increasingly attractive to both the consumer and main lenders, as it helps to reduce interest payments but also encourages customer loyalty and reduces the desire to remortgage for a better deal every few years.

Heather Scott, head of communications, Intelligent Finance, said: "When we started there were only three other providers, but now there are thirty offering an offset product of some description."

She added: "Offset mortgages provide a good deal and give something back to the customer."


© 1998-2005 DeHavilland Information Services plc. All rights reserved.

Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.