Speaking on Family Building Society’s Lunchtime Learning session on offset mortgages, Paul Roberts, senior account director at Family Building Society, explained that offset mortgages used to be “quite popular”, but there have been fewer lenders offering these products as interest rates fell to low levels.
Roberts continued: “They went out of fashion when interest rates were one and two per cent, but, gradually, I think they will come back into fashion. I think, specifically for buy to let, the fact that you can no longer offset the interest the same as you used to be able to do is very significant for landlords.”
He said that, with the mutual’s deal, landlords could fully offset the mortgage, making it “really useful” for landlords to build up a “slush fund” so they can go out and find new properties.
“It means they’ve got the cash there and they’re not having to do bridging finance at some point down the line, and it’s a time-saver with one fee of £999 as a general rule of thumb on a case up to £500,000 rather than one per cent fees for bridging. It could make a world of difference.”
Nathan Waller, business development manager (BDM) at Family Building Society, added that offset mortgages were “designed for portfolio landlords” as they generally had the “additional monies that are available”.
He explained that usually portfolio landlords could have five properties or more producing rent that would go into a current account that may not offer a good amount of interest, so an offset saver account would “really benefit them the most”.
“We are perfectly fine with portfolio landlords. We don’t background stress a portfolio, we effectively look at the property that we’re taking the security over, and as long as the mortgage that we’re taking is in personal names, then that’s perfectly fine.
“It’s all based on the individual and we’re always happy to have a chance to see what we can do for them. There’s no limit to how many offset mortgages they can have with us either, so they can look to have a couple of different ones depending on their/our exposure to their portfolio as a whole,” he added.
On 4 March, Family Building Society hosted a masterclass on the opportunity of offset mortgages.
Watch the full 44:58 video, hosted by Anna Sagar, deputy editor of Mortgage Solutions, with guests including Paul Roberts, senior account director, and Nathan Waller, business development manager at Family Building Society.
