Index Financial

An offset mortgage is a common mortgage product in the UK, and is designed for the purchase of domestic property. The key feature is the ability to reduce the interest charged by offsetting a credit balance against the mortgage debt. For example, if a mortgage balance is £200,000 and the credit balance is £50,000, interest is only charged on the net balance of £150,000.
There are limits however, and may be subject to periodic review. The lender may also put restrictions on the lending limits towards the end of the mortgage term with the goal of ensuring capital repayment. Offset mortgages were introduced in 1997, and were initially thought of as a niche product.
However, borrowers in the UK could save a whopping £345 billion collectively- if offsetting were as widespread in the UK as it is in Australia, according to a new report.
Director of sales at Intelligent Finance (IF), Cammy Amaira said, “In Australia, the popularity of offset has a lot to do with mind-set. Australians value home ownership as much as we do, but they don’t want their mortgage to take over their lives, making offset their ideal choice.” IF was launched in 2000 and is a division of the Bank of Scotland.
Mr. Amaira added that offset mortgages have “come a long way” in the past ten years in the UK; but IF would like to see the financial option take a boom in popularity, like it has in Australia and the “latest number crunching roves it’s definitely worth it”.
The average borrower in the UK could save a very attractive approximation of £70,000 with an offset mortgage, the research from Intelligent Finance has revealed.

The majority of fixed rate mortgages are currently only held for up to five years. But if Chancellor Alistair Darling gets his wish, fixed rate mortgages may settle in at the 25-year mark, becoming the norm in future lending.
According to Chancellor Darling, the impact of 25-year fixed mortgages would give homeowners more security- which he asserts has been lacking across the current uncertain financial landscape.Currently, Nationwide is the only major UK lender offering a 25-year, fixed rate mortgage. However, Mr. Darling also added that he wants to see “greater availability of affordable, long term fixed rates.” And that, “for many households, particularly those on low incomes, fixing the level of mortgage repayments for several years makes real sense. It can also contribute to wider macroeconomic stability.”
Supporting Alistair Darling’s views on fixed rate mortgages, the building society has recently announced its partisan outlook of the same sentiments. The society announced that the 25-year fixed rate mortgage was sold out in just five weeks when it launched in March of last year.
Maintaining a balance in lending practices to offer a variety of financial products to consumers in all walks of life, may in the end, prove key to long-term lending trends.

The sales of newly built city centre flats are being subject to conditions which could untether mortgage lending fraud. Lenders in the UK are wanting tighter, better rules to help prevent such practices from unfolding, and thus causing further rifts in the housing crisis.
Developers seeking to take advantage of uncertain market conditions may be tempted to offer deals which could lead to the inflation of property values, says the Council of Mortgage Lenders (CML).
CML is the trade association for the industry of mortgage lending and warns the incentivized deals could include cash-back offers, free holidays, paying of legal fees and buying of white goods, among the few mentioned.
The CML publication stated: “In recent years, discounts and incentives have had the effect of making the real value of new homes less than transparent. This is bad news for genuine buyers and for lenders. Buyers may find themselves with a mortgage worth more than the property’s value, while lenders may find themselves exposed to fraud and the risk of loss.”
Now that mortgage practices are under close scrutiny and lending is tighter than in decades, creating an atmosphere which may open doors to fraud must be carefully examined not only by industry experts, but also by would-be home buyers.
There are times when the oldest advice is the best advice for all; Caveat Emptor - Buyer Beware.

Mortgage experts John Charcol advised mortgage holders to stay on top of their repayments and to try and pay off their mortgages as soon as possible.
The advantage to paying off mortgages at the same rate, rather than dropping payments to the reduced base rate, gives homeowners the ability to pay off their mortgage early.
“For many people, the mortgage is what dictates when you can retire,” stated Katie Tucker, spokesperson for John Charcol. Adding, “By paying it off even a few years early it can make a difference to your quality of life not only because of age, but because of the money you free up to spend on other things.”
The independent mortgage group found that many first-time home buyers are couples moving in together. For people buying their first home or moving to another, a home loan may give an initial financial boost.
Over-all, paying off debt as early as possible during the current atmosphere of the consumers’ squeeze can only serve to protect individuals from the rising cost of loans and credit.