Offset mortgages growing in popularity

Rising interest rates along with soaring property prices have seen many different types of mortgages increase in popularity recently.

Also, according to recent reports offset mortgages have also increased in popularity over the past year, with the offset mortgage market growing by nearly 50 percent last year. Around 170,000 offset mortgages were taken out in 2006, and according to the Council of Mortgage Lender this figure represented 7 percent of all new mortgage lending.

An offset mortgage offsets the interest that the borrower paying on the mortgage loan against interest that is earned on savings, and according to Intelligent Finance, which is one of the major offset mortgage providers in the UK, offset mortgages are ideal for those with savings that equate to around 8 percent or more of the total value of their property. According to other officials these mortgages can also be ideal for those that get paid large bonuses or commissions.

The offset mortgage market has been steadily growing over recent years, and the popularity of this type of mortgage has been reflected in nearly £30 billion worth of offset mortgages being taken out last year.

According to industry experts there are now over 250 offset mortgage products available. Those interested in taking out an offset mortgage, as with any other type of mortgage, should take the time to compare a range of products from different providers in the offset mortgage field, as interest rates, terms and conditions, and other areas can vary from one lender to another.

Those interested in these mortgages should also bear in mind that there can be fees involved in setting up the mortgage, and borrowers may be tied in to the offset mortgage for a set period of time, and these factors should also be looked into.

Tom Smith
4th July 2007

Recent Mortgage News:

• Reclaiming Early Redemption Charges [02.07.06]
  There has been a lot of action and press coverage about bank charges, and, led by campaigners, customers have disputed such charges and in most cases money has been returned.
• Mortgage repayments at highest in fifteen years [01.07.07]
  Over the past year interest rates in the UK have risen a total of four times, each by 0.25 percent.The Bank of England raised interest rates in August and November of last year, and in January and May of this year, and many analysts predict that there will be a further rise in the summer.
• 100% mortgages double in a year [29.06.07]
  According to a recent report the number of 100 percent mortgage that are available in the UK has doubled in the space of a year in order to enable consumers with no deposit to get onto the property ladder.
• Unfair mortgage fee victims should seek compensation [19.06.07]
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More Information:

• Choosing The Right Mortgage
  The market is flooded with different types of mortgages, but how do you know which one is right for you? The decision has to be yours, whether you take advice from an Independent Financial Advisor or do your own research.
• Don’t Forget The Extra Hidden Costs Of Getting A UK Mortgage
  For most of us, buying a new home is both one of the most exciting and stressful times of our lives. It goes without saying then that this is not a particularly good time to find out that you may be facing a bill of thousands of pounds in extra hidden costs for getting the mortgage to buy the UK property.
• Can You Rely On Your Family To Help You Buy Your First Home?
  At no time in its history has the UK housing market since such a marked increase in the average value of its housing than in the last 20 years. Today, regardless of whether you come from the North-east or South-east, more and more young Britons are having to stay at home much longer and also to look more ingenious ways to try and raise the large deposits they’ll need in order to help them purchase that first home. The big question is, can you rely on your family to help you buy your first home?