Woolwich cuts offset rates on deal's tenth birthday

Woolwich cuts offset rates on deal's tenth birthday

Woolwich has today (June 1st) announced that it will cut its offset mortgage rates to celebrate the tenth anniversary of the package first being introduced.

It is ten years since Britain's first offset mortgage package was introduced and Barclays has heralded the impact the product has had on the UK's home credit market over the last decade.

On June 1st 2000, Woolwich changed the face of home credit lending in the UK by introducing the country's first offset mortgage, the blueprint for products which Barclays estimates has since saved its borrowers in the region of 1 billion in interest payments.

In order to celebrate this landmark tenth anniversary, Woolwich has cut the base rate of its current offset deal from 3.49 per cent (base +2.99) to 3.09 per cent (base +2.59).

According to Barclays, Woolwich customers are now keeping around 21,000 in their individual current account and savings accounts, while an offset mortgage from the lender is worth an average of 132,000.

This is enabling customers to pay off their mortgages around three years earlier than before as they are able to offset their savings against their home credit deal.

Andy Gray, head of mortgages for Barclays, said: "Offset mortgages stimulated a new approach to the way people have borrowed money over the last ten years.

"Previously, people treated a mortgage as a 25-year commitment, now people are knocking years off their mortgage, saving them masses in interest."

Mr Gray added that offset plans were destined to become a popular product due to the fact that they are "brilliantly simple" and allow people to go about their financial business as per usual while saving them cash.

Also, these deals allow customers to keep their savings accessible while automatically reducing mortgage interest without the burden of committing to a long-term bond.

Defaqto recently stated that there has never been a better time for higher-rate taxpayers to consider taking out an offset package due to the huge tax benefits they can offer if managed correctly.

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