Strong Growth in Offset Mortgage Market

by Gill Montia

Story link: Strong Growth in Offset Mortgage Market

According to Yorkshire Bank, four million borrowers in the UK could collectively save over £29 billion if they switched their mortgage, savings and current accounts to an offset mortgage.
The bank has estimated that four million people run their finances through one bank or building society, which could mean that they lose an average of £11,000 each.

The Council of Mortgage Lenders has reported an increase in the take-up of offset mortgages, with a 49% growth in the market between April 2006 and March 2007. During the year, 170,000 offset mortgages were taken out, representing seven per cent of all new lending.
Recent increases in the Bank of England’s base rate mean that many homeowners with offset mortgages are already benefiting because the positive balances in their savings and current accounts are offsetting higher mortgage interest payments. The main benefits of such a mortgage include lower interest payments and a shorter mortgage term.

There are currently 250 offset products available and as consumer awareness increases the potential for growth in the market could be substantial.