With a rate of only 0.19 per cent above Bank Base Rate for three years, borrowers will pay a negligible premium over the best non-offset three-year tracker. As a result, even borrowers with a very small amount of savings will find offsetting works for them.
Ray Boulger, senior technical manager at John Charcol, commented: "The concept of offsetting is brilliant but until now has always come at too high a price to be good value for most borrowers. This mortgage completely changes that with a rate only marginally higher than the best rate on a non-offset three-year tracker.
"Offsetting is la crème de la crème of flexible mortgages, combining full flexibility with maximum convenience. Getting maximum value from offsetting is about convenience of using the facilities as well as a market leading rate.
"This mortgage is even better as, unlike many offset mortgages, it allows borrowers to link a current account to their mortgage as well as one or more savings accounts."
Key Features
- Bank Base Rate +0.19 per cent to 1 May 2009, initial pay rate 4.69 per cent, 5.6 per cent APR
- Reverts to a low SVR of 5.7 per cent
- Maximum LTV 85 per cent, maximum loan of £5 million
- Arrangement fee of £699
- ERC’s of 4 per cent to 01/05/09
- Free legals and refunded valuation fee on remortgages
- Unlimited ERC free overpayments made by paying available funds into current or savings account
Boulger continues: "An additional benefit for remortgagers is that as well as free legals the whole valuation fee is refunded. Many remortgages which offer a free or refunded valuation fee cap this benefit at around £500, but with this deal there is no limit. Even on a remortgage for the maximum loan of £5 million would get the full amount refunded, despite this being several thousand pounds.
"A further benefit for all borrowers is that, unlike many other tracker and discount mortgages, this deal has no collar and so borrowers are guaranteed to see their rate move in line with Bank Base Rate until 1 February 2009 even if base rate plumbs new lows."
