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first direct offset lifetime tracker mortgage

1st December 2009 Print

Commenting on the new first direct offset lifetime tracker mortgage, Hannah-Mercedes Skenfield, mortgages channel manager at, said: "It is encouraging to see first direct launch another competitive offset product and giving borrowers an opportunity to manage their finances in a way that makes efficient use of savings capital. At 2.08 per cent above the Bank of England base rate, this tracker will look very appealing to those who can stump up the hefty 35 per cent deposit needed.

"Many people are put off by offset mortgages due to perceived complexities, however offset mortgages are actually very straight forward and have many benefits - although the best deals do tend to be restricted to those with a low LTV and borrowers will need to have money in the bank to be able to offset. Offset mortgages aren't just advantageous for those with a consistently high level of savings though; they can be a good option for those who are self employed and saving throughout the year for their end of year tax return or those who periodically receive large bonus payments which they don't plan to spend immediately.

"It is also important to remember that offset mortgage interest is calculated daily and borrowers will have instant access to their savings. Homeowners don't have to have all their savings tied to their mortgage all of the time; although the longer they can leave savings in the offset account the more they will ultimately save.

"Borrowers looking at this lifetime tracker deal must take into consideration the expected base rate rises and make sure that they can still afford repayments if and when the Bank of England does increase rates. The decision between a tracker and a fixed rate is always somewhat of a gamble, and whilst some people like the certainty a fixed rate mortgage provides, the savings on offer from this tracker mortgage are hard to ignore.

"In order to establish the best deal for their personal circumstances it is important borrowers shop around to make sure they get the right mortgage to suit their needs, and aren't afraid to ask for help from a qualified financial advisor if they are still unsure."