First Direct has launched a three-year fixed rate offset mortgage at 5.39%.
The rate is a limited offer and is available from today, Friday June 30. The three-year fixed deal reverts to an award winning SVRof 5.50% and has a maximum loan-to-value of 80%.
In addition to the great rate, the mortgage has an offset facility which links day-to-day savings and current account balances to the mortgage, so customers only pay the interest on the difference.
This reduces the total amount owed, meaning that less interest is paid, for example, someone with a 100,000 mortgage and 20,000 in savings would only pay interest on 80,000.
A typical couple with a 102,800 mortgage and an average savings balance of 5,159 each could save as much as 294.42 in just one year by switching to an offset from a mortgage paying the same rate of 5.39%.
Chris Pilling, first directs chief executive, says: Fixed rate home loans have proved a huge hit with homeowners. In fact, seven out of every 10 is now a fixed rate compared to just 10 years ago where it was less than two in 10.
Homeowners are telling us that they want the comfort of a fixed rate which is why well continue to launch such great deals.