Standard Life Bank is planning an offset mortgage in a bid to challenge market leaders Intelligent Finance, Woolwich and Britannic Money.
The bank plans to offer the product – where borrowers offset savings against their loan to reduce interest payments – over the next few months to reverse its decline in new business.
Both IF and Woolwich laun-ched offset products 18 months ago and brokers credit their success with stifling Standard Life's growth in the market.
Standard Bank says it decided to offer an offset range – rather than current account mortgages – because it bel-ieves most borrowers do not have the discipline to run a CAM without running into difficulties. But some brokers say the move may be a backlash to IF's decision to model itself on Standard Life, a strategy they believe has cost it market share.
London & Country head of operations and compliance Patrick Bunton says: “It was inevitable really. IF and Woolwich have hurt Standard Life more than most and I think this shows them fighting back.”
A Standard Life spokeswoman says: “We are looking at introducing offset mortgages in the coming months but will not be considering launching current account loans. Most borrowers just are not disciplined enough.”