24 May 2017
It’s time to dispel the myth that borrowers need to pay a premium for offset, or that it is only for those with substantial savings.
This misconception could not be further from the truth. With an offset mortgage, no matter what the size of a borrower’s savings, they can use them to reduce the mortgage amount they pay interest on – what’s not to like?
Borrowers from all walks of life can benefit from offsetting, not just those with fluctuating incomes, the self-employed or professionals. First-time buyers who might be saving for renovation work, existing homeowners saving for an upgrade or their children’s university fund are all prime candidates.
In the current low interest rate environment, in order to benefit from a good return on their cash, customers would have to tie into a long term fixed rate savings plan, which isn’t ideal for a lot of borrowers.
On top of this, offset customers can access their funds 24/7, allowing them the freedom and flexibility to be creative with their cash portfolios, to save for their annual tax bill or just have peace of mind that their cash is available for a rainy day.
Offset rates have fallen considerably over the last few years but your customers may want you to obtain the lowest possible mortgage rate for them and may question an offset mortgage on these grounds. The world of offset however will be a new concept to many of them, some of whom might never even have heard of it before. In this scenario, your advice will prove invaluable to them.
Through Scottish Widows recent research with the broker market, you told them that you often find explaining offset mortgages to customers a challenge and many of you admit to having limited knowledge. They’ve listened to you; and produced a number of tools to aid your understanding which in-turn will benefit the grasp of your customers.
An “Introduction to Offset” is a simple 2-minute film that you can use to show your customer the benefits of offsetting. You too might be surprised as to how many borrowers offset “adds up for”, so take a look at their film today.
Once you have your customer’s attention, you can use their online calculator to show them visually just how much they could save each month by offsetting. Then ask them how much interest they are earning on their savings and let them see which is greater.
Scottish Widows Bank want to help you and your customers. They would be interested in your thoughts on offset, any barriers you face, or how they could help, so please speak to your Business Development Manager or email them at $SWBMarketing@scottishwidows.co.uk and check out their calculator here.
For more information on Offset, take a look at our Offset page on our website here.