Yorkshire Bank: Homeowners opt for offset protection against rate rises

23 January 2007
One third more customers have chosen offset mortgage products since the first UK interest rate rise in August, Yorkshire Bank has revealed.

"People with these types of mortgages won't suffer as much in this climate of rising interest rates as they link homeowners' current, savings and mortgage accounts together," commented senior marketing manager Stephen Porter.

"This means their savings rate will have a greater offsetting effect on their mortgages, helping them save thousands of pounds and knock years off their mortgage term," he continued.

But the bank found that 22 per cent of people are missing out on offset advantages by failing to set up a savings account whose additional interest can be offset against their mortgage.

"Just like a gym membership that people stop using, people are not making the most of their savings account and are losing money," Mr Porter stressed.

Last week, financial advice site moneysupermarket.com urged mortgage holders to opt for offset mortgages in the aftermath of a third consecutive interest rate rise, predicting that the product type would become increasingly popular with 30 providers now on the market.

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