40% of suitable borrowers not offered offset by advisers
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Up to 10 million homeowners may be missing out on making the most of their savings with an offset mortgage, Yorkshire Building Society claims.
Research conducted by the mutual shows 40% of borrowers with medium or large savings balances were not offered an offset product as an option by their adviser.
Furthermore, just 7% of consumers considered an offset product when taking out their mortgage.
The survey reveals a lack of understanding about this type of mortgage, with a third of respondents unaware offset exists, a third having no idea how it works and a further third having an incorrect understanding.
Chris Smith, group direct mortgage manager at the Yorkshire, says misconceptions about offset mortgages abound but products of this kind have significant financial benefits, particularly in the current market.
He says now is the perfect time to consider an offset product, because the Bank of England base rate is at a historic low and inflation is high, meaning savings accounts have low interest rates.
Smith believes so many advisers are not recommending offset products because there is limited availability in the market.
He says: “There are not many competitors out there, particularly for the intermediary market, and we are one of the only providers to offer offset in branch.
“I also think that a lot of intermediaries are not savings-orientated, so they do not often look at the benefits offset can bring to a consumer’s savings.”
Smith says the Yorkshire is committed to offset and looking at developing a number of new products in this area, including an offset ISA and a first-time buyer offset.
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Readers' comments (2)
Anonymous | 6 Apr 2011 3:52 pm
As an existing customer of YBS with an offset mortgage I would like to mention that the rates are higher than the standard products IF you select offset. YBS might be committed but they are also benefitting from charging a higher rate. Scottish Widows Bank also offer offset and they pay a proc fee to IFAs.
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Richard | 6 Apr 2011 4:20 pm
Another snipe at what should have been then but only realised now with that masters degree in hindsight. Let's get on with the present. There is no future to the past.
Upon what direct evidence are Smith's comments based?
Smith believes so many advisers are not recommending offset products because there is limited availability in the market.
He adds,
"I also think that a lot of intermediaries are not savings-orientated, so they do not often look at the benefits offset can bring to a consumer’s savings.”
Marketing buffalo ****
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