New fixed-rate offset offers launched by first direct

Mortgage lender first direct has announced that it is launching fixed-rate offset mortgages for terms of two and ten years with rates of 4.99 and 5.19 per cent respectively.

These offers have overall costs for comparison of 5.6 and 5.8 per cent APR respectively.

According to first direct, both of these rates are among the lowest in the market. Both will revert to the lender’s standard variable rate of 5.75 per cent and allow maximum loan to value levels of 80 per cent.

The offset facilities in these products link day-to-day savings and current account balances to the mortgage, meaning that customers only pay interest on the difference, meaning that the total amount owed is reduced.

As an example, first direct claims that someone with a mortgage of £100,000 and savings of £20,000 would only pay interest on a sum of £80,000.

Chris Pilling, chief executive of first direct, said: “These two new mortgages are unique in the market at the moment.

“Not only are they very competitive but customers can move as many times as they like at no extra charge, overpay, underpay and redraw funds, without further approval, at a moment’s notice.”