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Woolwich sets up savings deal on flexible loan

The Woolwich is offering a flexible mortgage which allows the parents of first-time borrowers to offset savings against their

child&#39s loan.

The Open Plan Offset Together loan gives parents paying the deposit for their child&#39s mortgage the chance to put the money in a separate account which they can withdraw from or add to at any time.

Borrowers only pay interest on the difference between the amount borrowed and the amount in the savings account.

A borrower with a £100,000 mortgage whose parents offset £10,000 of savings will only pay interest on £90,000 for as long as that level of savings remains in the account.

Borrowers can use the offset funds to reduce their monthly payments or retain the same repayment level and pay off the loan early.

Woolwich says anyone can offset funds against the mortgage but believes it will appeal mainly to parents.

Chief executive Lynne Peacock says: “We know that many parents give their children a helping hand with their mortgage.

“Our first-time buyers survey found that 27 per cent were given their deposit by a family member. Now there is a new way for them to help every month while keeping control of their investment.”

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