Offset mortgages become popular
Offset mortgages have more popular during the recession as savings rates take a tumble.
Mortgage lender First Direct explained that new offset mortgage business increased by 16 per cent in the last quarter of 2008.
Swapping the type of home loan could reduce the length of a £100,000 25-year mortgage by nearly 3 years and save £18,321 in interest payments over the duration of the loan deal.
Jimmy Kelly from First Direct commented: “Offset mortgage lending now accounts for £1 in every £10 being lent to UK mortgage holders, and is on course to reach a record share of new mortgage lending in 2009.”
A further investigation revealed that a vast majority of homeowners are unaware of the benefits of offsetting.
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