A
John Charcol three-year
offset tracker mortgage deal has been introduced today, with
a mortgage rate of 0.19 per cent above the Bank of England's
base rate .
The
mortgage broker claims that at this
mortgage rate, borrowers will pay a "negligible
premium over the best non-offset three-year tracker".
It was also asserted that the offset
tracker mortgage was a viable option for customers with very little
savings .
Offsetting allows a borrower to reduce the
interest on their
mortgage by the
funds in both their
savings accounts and
current accounts .
The higher the balance of their
savings account, the
less interest is paid on their mortgage, which helps them to
repay their mortgage faster and
cheaper in the long-term.
However,
no interest is paid on the balance of the savings
account or
current account.
Ray Boulger, senior
technical manager with John Charcol, said: "The concept of offsetting is brilliant but until now has always come at too high a price to be good value for most borrowers.
The company charges a
broker fee of up to 1 per cent of the sum borrowed, as well as a £75 booking when applying for any of their exclusive or semi-exclusive deals.
The John Charcol 3-year offset tracker
mortgage deal will continue to track the base interest rate until May 1st 2009, with an initial mortgage rate of 4.69 per cent and an
annual percentage rate of 5.6 per cent.
