Offset mortgages could have waned in reputation within the low-interest-rate surroundings, however they could be a very important software for landlords within the present market.
Speaking on Family Building Society’s Lunchtime Learning session on offset mortgages, Paul Roberts, senior account director at Family Building Society, defined that offset mortgages was “quite popular”, however there have been fewer lenders providing these merchandise as rates of interest fell to low ranges.
Roberts continued: “They went out of fashion when interest rates were one and two per cent, but, gradually, I think they will come back into fashion. I think, specifically for buy to let, the fact that you can no longer offset the interest the same as you used to be able to do is very significant for landlords.”
He mentioned that, with the mutual’s deal, landlords might totally offset the mortgage, making it “really useful” for landlords to build up a “slush fund” to allow them to exit and discover new properties.
“It means they’ve got the cash there and they’re not having to do bridging finance at some point down the line, and it’s a time-saver with one fee of £999 as a general rule of thumb on a case up to £500,000 rather than one per cent fees for bridging. It could make a world of difference.”
Nathan Waller, business growth supervisor (BDM) at Family Building Society, added that offset mortgages have been “designed for portfolio landlords” as they typically had the “additional monies that are available”.
He defined that often portfolio landlords might have 5 properties or extra producing lease that might go right into a present account that won’t supply a very good quantity of curiosity, so an offset saver account would “really benefit them the most”.
“We are completely tremendous with portfolio landlords. We don’t background stress a portfolio, we successfully take a look at the property that we’re taking the safety over, and so long as the mortgage that we’re taking is in private names, then that’s completely tremendous.
“It’s all based on the individual and we’re always happy to have a chance to see what we can do for them. There’s no limit to how many offset mortgages they can have with us either, so they can look to have a couple of different ones depending on their/our exposure to their portfolio as a whole,” he added.
On 4 March, Family Building Society hosted a masterclass on the chance of offset mortgages.
Watch the complete 44:58 video, hosted by Anna Sagar, deputy editor of Mortgage Solutions, with company together with Paul Roberts, senior account director, and Nathan Waller, business growth supervisor at Family Building Society.
Anna is a reporter for Mortgage Solutions and assistant editor for Specialist Lending Solutions, each B2B sister titles of YourMoney.com. She has labored as a journalist for over 4 years, initially within the specialty insurance coverage sector earlier than shifting onto mortgages.
