Caution advised over current-account mortgage offers

26-Jun-2008

First-time buyers considering bank mortgage deals linked to their current account should also consider an offset product, according to one financial advice portal.

Representatives for moneysupermarket.com issued the suggestion following the Co-Operative Bank's decision to offer current account customers "an attractive mortgage product range".

"Co-Op customers with equity or a sizeable deposit will be laughing as they are eligible for the 5.99 per cent mortgage rate," remarked a spokesperson for the website.

"But borrowers without these will pay much higher rates - further widening the gap between the haves and have nots."

She went on to suggest that considering an offset product could ultimately help individuals with healthy balances repay their mortgage quicker.

"If offsetting doesn't suit you, you should compare current account interest rates before opting for the Co-Op," the spokesperson concluded.

Potential homebuyers have previously been advised that mortgage provider "perks" should not be as high on their priority list as factors like interest and loan-to-value.

Moneyfacts emphasised that a mortgage represents a considerable investment and "a massive decision for someone to make" following Lloyds TSB's decision to launch its Airmiles mortgage.

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It 'makes sense' to shop around for best mortgage rate Mortgage perks 'are relatively unimportant'

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