Offset mortgage rates could become less attractive.
If you are looking for competitive offset mortgage rates now is the time to source a deal.
Lenders have recently started to increase their offset mortgage rates in response to increased funding costs. This now means home-owners many need a higher level of cash savings to make an offset worthwhile.
Despite increased rates, offset mortgage products still offer a flexible way to repay a mortgage and are likely to remain attractive while savings rates remain so low. Offsets currently offer cash rich mortgage-holders tax free interest on their savings which is the same as their mortgage rate.
The warning is rates for these deals are becoming less attractive. A number of offset mortgage lenders have recently announced rate increases.
The Chelsea Building Society has increased the price of some offset mortgage rates 0.20 per cent above its standard mortgage rates. When Chelsea launched an offset version across its entire range of products last October, it announced the price differential between standard and offset products would be 0.1 per cent.
Rates are increasing across the board therefore it was unlikely that offsets would remain unaffected, and despite increases they do still offer benefits.
Borrowers can still retain unrestricted access to savings and can therefore withdraw or deposit funds at will. An offset mortgage still remains a good option for those with savings and higher-rate taxpayers.
If you are looking to compare offset mortgage rates contact Deal Direct for a comparison today.
