Offset mortgages 'growing in popularity'

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Offset mortgages 'growing in popularity'

Offset mortgages are becoming increasingly popular among consumers, new figures from the Council of Mortgage Lenders (CML) show.

Its research indicates that the growth of the offset mortgage market increased by 49 per cent between April 2006 and March 2007.

Some 170,000 offset mortgages were taken out during the year, a figure which represented seven per cent of all new lending.

The CML believes that offset mortgages possess a number of benefits for borrowers, including lower interest payments and a shorter mortgage term because the interest is charged against a lower mortgage balance.

Savings in the borrower's account also helps to reduce mortgage costs, which could mitigate the effects of interest rate rises.

Author of the research and CML statistician Phoebe Zhang said: "Mortgage lenders are constantly developing new products to meet the needs of borrowers and the fact there are now 250 offset products available in the market illustrates."

She added: "Going forward, continued innovation by lenders will help to increase consumer awareness of offset products and expand the market potential for offsets in the future."

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