From 13 June, customers applying for a part-fixed, part-variable loan will be able to offset their savings against the variable (including discounted and tracker) portion of their mortgage, potentially saving thousands of pounds in interest.
The option of using an offsetting facility against a portion of the mortgage is also available for part-interest-only, part-repayment mortgages.
Commenting on extending this facility, which allows more customers access to the benefits of offsetting, Gordon Bowden, Business Development Director at Scottish Widows Bank, said: “We believe customers are looking for flexible solutions to meet their individual needs. This enhancement is market leading and gives the best selection of options possible in the offset arena.
“Offsetting is a real opportunity for customers to make the most of their savings and save money on their mortgage. However, unlike some lenders who have altered their product pricing in some way because offsetting is involved, we are maintaining our existing pricing policy for customers wanting the benefits of offsetting. This includes no arrangement fee.
“Offset mortgages have risen rapidly in popularity during recent years as consumers become more aware of money they can save on their mortgage. We believe that by 2007, offset mortgages could account for 25% of the market. Our offset business is testimony to these levels of growth, having seen an increase in applications for this facility rise by over 100% in the past year.”