Anthony Emmerson

Now,

That means that you could probably take two Bank of England base rate increases before you reached the situation where your fixed rate would put you.

Most of the trackers as well don't seem to have early repayment charges applicable to them.

So it gives you more freedom to be able to make overpayments, refinance at a stage that the market may have improved.

And it really just comes down to

what you as an applicant have as a risk appetite because we have already somewhat priced into bank of england base rate increases so it is highly likely that by the end of this year you will probably be looking at nearly four and a half percent on that tracker rate however if the rate then turns around and starts going downwards just as quickly as it went upwards then you might very well find that product beneficial

If it keeps on going north, then that product is not as clever.

Correct.

And I think it's being used more by people who are expecting some sort of windfall, big bonuses, an inheritance, some sort of asset payout that they could then use that tracker rate and the flexibility that comes with it to make a rather large overpayment.

Because when you're looking at interest rates at sort of four and a half odd percent to achieve that as a net return in the market,

is a little bit more difficult than most people would like.

So therefore, we're seeing a lot more people reduce their mortgage lending because of the fact that it's got a guaranteed return, if you like.

Yeah, less and less popular, mainly because of the fact that it costs the lenders so much to administer it.

The borrower will generally find it quite attractive if it's used correctly.

But what we see on our side is that offset mortgages are generally around about 15% to 17% more expensive in rate than you'd be able to get a standard product for.

Now, that means that you have to have that amount of money or more in your offset account at all points during your mortgage in order to be able to meet what you could have got on a standard mortgage.

It's only if you've got more than that 17 odd percent that you start to benefit compared to what you would have had on a normal mortgage.

It works quite nicely for people who are capital raising because they're at the end of their fixed rates and they want to do a massive home renovation and all that money needs to sit somewhere while they

drip it out over time.

But if you haven't got the right situation for the requirement for that, then it isn't a product that is as popular as you might think.