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Wednesday 16th of June 2010
June 2, 2010    

Barclays celebrates offset anniversary with rate cut

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by Gill Montia

Barclays is celebrating the tenth anniversary of the UK’s first offset mortgage.

The bank’s Woolwich subsidiary took the plunge in June 2000 and the lender claims it has saved borrowers more than £1 billion in mortgage interest over the years.

The average Woolwich offset mortgage stands at £132,000 and customers typically keep £21,000 in their savings and current accounts.

By offsetting deposits against the mortgage, today’s Woolwich borrowers are on track to pay off their mortgage around three years ahead of schedule.

Barclay’s head of mortgages, Andy Gray, comments: “Offset mortgages stimulated a new approach to the way people have borrowed money over the last 10 years, previously people treated a mortgage as a 25 year commitment, now people are knocking years off their mortgage, saving them masses in interest.”

Referring to the offset concept as “brilliant”, he adds: “People just manage their current account, savings and mortgage separately as they have always done and in the background all the components are added together every day, to save people interest and pay off their mortgage earlier.”

To mark the decade, Woolwich is cutting the rate on its current offset deal from 3.49% (base + 2.99) to 3.09% (base + 2.59).

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