Consumers confused over offset mortgage benefits
Conducted by First Direct, the poll revealed that 40 per cent of consumers in the UK do not understand the mortgages, which are linked to current accounts, while a further 35 per cent only have a rough idea of what they entail.
The lender explained that repayments for a 25-year mortgage on a £100,000 property could be cut by £24,232 and the time spent paying back interest reduced by four years.
Jimmy Kelly, head of mortgages for First Direct, said: "It’s a real worry that consumers are not aware of the benefits of an offset mortgage ."
First Direct currently has the market-leading offset tracker mortgage, which would have an equivalent savings rate of 5.10 per cent for higher earners, he added.
An offset mortgage at 3.25 per cent with a loan-to-value of 75 per cent was recently launched by Abbey, available to customers who have already been with the lender for more than six months.
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