Offset mortgages represented 7 per cent of all new lending in 2006 according to new research by the Council of Mortgage Lenders, showing strong growth in the number of people opting for an offset mortgage.
During 2006 170,000 offset mortgages were taken out, worth £29.3 billion – equivalent to 7 per cent of all new lending. And, the year-on-year growth of offset mortgages between April 2006 and March this year was 49 per cent (by value) – compared to just 15 per cent for non-offset lending.
The research also revealed that the majority of offset mortgages are sold through intermediaries. Over the past two years intermediaries have seen year-on-year growth of offset products increase by more than 100 per cent in some months, and by the end of last year intermediaries accounted for 60 per cent of offset mortgage sales by value, compared to 45 per cent in April 2005.
The profile of a borrower that opts for an offset mortgage is slightly different to other borrowers, according to the research. The average age of an offset borrower is 41, and the product remains most popular with people remortgaging.
Author of the research and CML statistician Phoebe Zhang says: “Today’s research reflects the dynamic nature of the UK mortgage market. 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 this.
“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.”