So many people tell me that their clients have decided to “stick to their SVR or tracker” as they couldn’t beat the variable rate their clients were on.
Yet, it is highly likely that many of these clients could benefit from a product such as offset if they would only engage for long enough to find out.
Sales of offset mortgages are growing again and Barclays/Woolwich is doing a fantastic job of helping to raise the profile.
However, there is still so much untapped potential.
Many customers who are currently paying lump sums off their mortgage would be better with an offset account where at least they know they could call on these funds again if they needed them.
Offsets are also great for self-employed clients with erratic income, those with tax liabilities who can use the cash flow to their advantage, or just those people getting a negligible level of return savings accounts.
I reckon that a significant proportion of brokers reading this (not to mention people working in lenders’ product design teams) will have an offset of their own. That’s the biggest endorsement there is.
So, we’ve established that an offset mortgage is a pretty clever mortgage, but is it sexy?
To be fair, the name is not initially inspiring – it does sound a bit more like a mortgage that would be found in the library rather than the nightclub.
It must be a bit geeky, being associated with all those graphs and spreadsheets… but despite all that, I think if we can get the chance to show a client the savings they can make through clever use of an offset facility, they will think it is pretty appealing.
It’s the sort of product that needs a bit more explanation and it certainly isn’t as simple as comparing headline rates.
But those brokers who have caught on to this, and are taking advantage of the wider publicity surrounding offset are finding that they have a lot more to offer to their “sticking on SVR” clients than they thought they did.
Jon Round is chief executive of First Complete
