The Flexible Plus mortgage, at a variable rate of 4.50%* (4.25% for loans over £250,000) has all the benefits of a flexible mortgage, e.g. overpayments, underpayments and payment holidays with the added bonus of allowing savings balances to be offset against the mortgage balance.
The savings balance can be deducted from the outstanding mortgage balance, with interest only charged on the remaining amount, meaning reduced monthly payments. This can lead to a reduction in the mortgage term. As there is no interest earned on the savings balance, this also becomes a tax-efficient way to save money.
Guy Aldwinckle, head of mortgage marketing at Abbey National says:
“The popularity of flexible mortgages is on the increase as more people realise the benefits of having control over their mortgage. The Flexible Plus mortgage offers homeowners further choice and can have significant benefits when compared to keeping mortgage and savings accounts separate.
“At a time of underperforming stock markets and low interest rates, flexible offset mortgages can offer real savings. For example, with a mortgage rate of 4.50% pa, the effective gross rate a basic rate taxpayer would need to earn on their savings would be 5.62% and a higher rate tax payer would need to earn 7.50%.”
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Flexible Plus Mortgage – example savings:
- Mortgage of £80,00 over 25 years at an interest rate of 4.50% on a property valued at £100,000 – with a monthly repayment of £444.67
- With Flexible Plus Mortgage: An offset savings balance of £10,000 will save £17,453 in interest and reduce the mortgage term by 5 years and 1 month
The Flexible Plus mortgage has a rate of 4.50% and is available up to 90% loan to value. It has no redemption penalties or tie-in periods. It will be available via branches, via the telephone and through intermediaries. The savings can be accessed at any time, with withdrawals or deposits being made via the telephone, internet or post and all transactions relating to the savings element will be clearly itemised on a separate page of the mortgage statement.
To find out more customers can call 0800 555 100 or visit the Abbey National website at www.abbeynational.co.uk
