Mortgages  

Family unveils offset savings account

Family unveils offset savings account

The Surrey-based Family Building Society has launched a flexible offset mortgage linked to a savings account, allowing borrowers to reduce the amount of interest they pay.

Key features:

■ Borrower and family member offsetting available

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■ The money held in the account is deducted from the total mortgage so interest is charged on a lower amount of capital

■ Available for purchase or remortgage up to 80 per cent loan-to-value

■ Initial two-year discounted variable rate, currently 2.39 per cent (2.50 per cent discount), reverting to Family Building Society variable Managed FlexiMortgage Rate, at 4.89 per cent

■ Unlimited overpayments allowed with no early repayment charge

■ ERC payable only on full repayment of the mortgage – 2 per cent during the first two years

■ Underpayments, payment holidays and borrow-back facility available up to the value of previous overpayments

■ Offset up to 100 per cent of the mortgage balance

■ Offset Saver Account must be opened. No interest paid

■ The product is available for a property purchase or remortgage, and for the self-employed and first-time buyers, and has a £545 product fee.

Adviser View

Chris Taylor, director of the London Mortgage Brokers, said: “It is competitive at 80 per cent, and has a reasonably small arrangement fee, so would work well for smaller loans where £999-plus arrangement fees work out expensive.

“Being a discounted rate you are also subjected to movements of the standard variable rate and so it would be interesting to see that if there were a cut to bank base rate, whether the full cut would be passed on.

“The Family Building Society will also consider expatriates for a 1 per cent loading on the rate, which is great news for brokers and consumers alike.”