Online Bank Accounts – UK

On the 2nd of February first direct (firstdirect.com) launched a new best buy offset tracker mortgage which tracks the Bank of England base rate plus 1.89% (currently 2.39%).

The mortgage requires a 65% loan to value and has an arrangement fee of £999.

It must be pointed out that research from first direct shows that many home-owners still do not understand the benefits of offsetting .

Actually,  just two of them in 10 (21 per cent) see offsets as a way they can save money on their mortgage. And close to half (48 per cent) admit they don’t understand the basic principle.

The key features of first direct’s offset tracker mortgages are:

• financial benefit of offsetting any credit balances against the mortgage
• customers don’t receive interest on their linked savings with an offset Mortgage, instead reducing the amount of interest on their borrowings, they don’t have to pay tax on their savings
• ability to move the mortgage to a new property, as many times as they like without any product fees
• ability to redraw funds at the same rate throughout the term of the mortgage, back to the original mortgage limit
• minimum loan size is £30,000
• the flexibility to make unlimited overpayments in either lump sums or regular payments
• available for both purchase and remortgage