Yorkshire Building Society has launched a family offset account which provides family and friends with a way of giving financial help to their nearest and dearest, without handing over their own life savings.
Offset Plus, which is most likely to appeal to first-time buyers, allows parents to help ease the pain of mortgage payments by linking their savings to the new borrowers mortgage. Savers retain full ownership and access to their savings, but forfeit interest in exchange for a reduced mortgage payment for their children.
As the savings dont earn interest there is no tax to pay – usually 20% tax (40% for higher rate tax payers) is taken from all savings interest, generating a greater benefit for the borrower.
The Offset Plus facility is available on all Yorkshires competitive range of offset mortgages, which include a choice of fixed rates and lifetime tracker rates. All the Societys offset mortgages are fully flexible, charge interest on a daily basis and have the facility for over and underpayments. Six months accident, sickness and unemployment cover is also provided free of charge.
Rachel Court, head of mortgages at the Yorkshire says: “Offset Plus has been designed with first-time buyers in mind. It allows parents, who cannot afford to gift a sizeable amount of money to their children, an option where they can provide financial support to their children.
“Offset Plus does not allow individuals to borrow more than they can afford, but helps to make life easier once they have taken that big step onto the housing ladder.”