first direct launches new range of offset mortgages

first direct, part of HSBC, has launched a new range of offset mortgages with up to 75% LTV.

The new offset mortgages are available from today 22 May.

They are available to new and existing cutomers, for house purchase or remortgage.

first direct are offering different options depending on whether you are looking for low interest rates or low upfront fees.

There are 2 year and 3 mortgage deals available:

2 year offset

• 2.99% with £499 booking fee and £999 arrangement fee – APR 3.8%
• 3.49% with £99 booking fee and no arrangement fee – APR 3.7%

3 year offset

• 3.89% with £399 booking fee and £599 arrangement fee – APR 3.9%
• 4.09% with £99 booking fee and no arrangement fee – APR 3.9%

first direct’s mortgage manager, Jimmy Kelly, commented ‘Offset mortgages are starting to be recognised as a great way for people to have flexibility and make the most of their money.’

In support of this, Kelly commented ‘with our 2.99% fixed rate, customers would need to receive an interest rate equivalent to 3.80% AER on their savings account for a 20% taxpayer and 5.10% for a 40% taxpayer for them to achieve the same benefit as offsetting any credit balances they have against their mortgage.’

Clearly with this news from first direct, that from Yorkshire Building Society on how their Offset plus mortgage is a major hit, and Woolwich announcing a cut in the rates on their offset mortgages, we are seeing the competition amongst the mortgage lenders hot up.