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Analysis: 15 years on, offset has much to offer

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The offset mortgage recently celebrated the 15th anniversary of its introduction to the UK market. The product has evolved over the years but many original and critical elements remain the same. 

Although the offset and current account mortgage market started as a niche product, Datamonitor predicted that, by 2009, it would account for 30 per cent of total mortgage lending. This may have been a bit wide of the mark but the popularity of offset has grown substantially over the years.

Rates, too, have made huge strides. According to data from Moneyfacts.co.uk, rates on offset mortgages have plunged to an all-time low. The average fixed rate is said to be priced at 2.65 per cent – more than one percentage point lower than two years ago.

Despite this evolution and the obvious benefits and flexibility, it remains an under-utilised facility for many borrowers and has still to be grabbed with both hands by brokers. On its school report the words “Could do better” may be apt, but there has never been a better time to fully embrace a concept that remains the market’s best-, and worst-, kept secret.

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The value of an investment and any income from it can fall as well as rise and you may not get back the amount originally invested. Forecasts and past performance are not a guide to future performance. Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. These are Neptune’s views and as such this document is deemed to be impartial research. We do not undertake to advise you of any change to our views.

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