Offset mortgages 'attracting first time buyers'

26-Jun-2007

The Council of Mortgage Lenders (CML) has reported a significant increase in the uptake of offset mortgages as first time buyers and other borrowers look for more flexible ways of paying their bills.

Around 170,000 offset mortgages were taken out in 2006, accounting for approximately seven per cent of all lending, the CML has advised, with year-on-year growth up to March 2007 standing at 49 per cent compared to 15 per cent for the rest of the market.

The ability to make over or under-payments due to the way that the product combines both mortgages and savings into a single account make the product particularly attractive to those looking for flexibility.

However, CML research indicates that the product remains most popular with those remortgaging.

Homeowners could save more than £29 billion in interest and income tax by switching to an offset product, Yorkshire Bank noted earlier this week.

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