New First Direct offset mortgage launched

Date:Tuesday 3rd March 2009
Author: Max Freedman

A new fixed-rate offset mortgage product has been released by First Direct.

The mortgage, which requires a deposit of at least 25 per cent, carries a booking fee of £599.

A £299 arrangement fee is also included and the mortgage is available for purchase or remortgaging.

"More and more are understanding the huge benefits of offsetting their mortgage," said Jimmy Kelly, mortgage manager for First Direct.

Finance website explains that offset mortgages can help borrowers pay off their home loan sooner.

Money in other accounts is offset against the mortgage debt and enables lenders to calculate interest on a daily basis while savers can escape being taxed on the interest.

But the website also warns that offset mortgages do not usually give the best interest rates available and that changing lenders regularly could be a better option for borrowers.

Offset mortgages are said by the site to be best for people with substantial funds in their accounts.