Newcastle Building Society has launched an offset tracker mortgage at 4.5% with no early redemption penalties, and with an initial discounted rate of 3.9%.
The product, which the society believes is market-leading, is available to potential and existing homeowners. The initial rate of 0.1% below base (3.9%) for six months reverts to 0.5% over base for the remainder of the term (4.5%).
The mortgage is available online now and in branches by end of the month. Applications can be completed online. There is the ability to operate the account online 24 hours a day including transferring funds, viewing statements and viewing the account balance. There is also the option to link up to three external savings or current accounts to transfer money in and out of the offset savings account.
Interest is calculated on a daily basis and additional payments can be made free of early repayment charges. There is an LTV of 85% and the product comes with free buyer's costs insurance. There is a £295 completion fee and a valuation fee is also applicable. A search insurance fee of £60 is applicable for remortgage cases only. There is a bank transfer fee of £30.
Robert Hollinshead, Newcastle Building Society chief executive, says: “Offset mortgages are a very effective way of making your savings work harder for you, particularly in a low interest rate environment when returns on savings accounts are relatively low, and even more so if you are a higher rate tax payer. We believe that our offset product is a genuine best buy, offering a market leading rate. Even without the offset facility, this product still has the best long-term underlying rate with the added bonus of no tie-ins.”