Newcastle launches Praxis offset

Designed as a credit repair tool for the near prime market, key features of the product are as follows:

• Borrowing criteria: Unlimited defaults but no mortgage/rent arrears or CCJs or IVAs in the last 12 months
• Initial interest rate: 1% above Bank of England base rate (currently 6.75%) until 30.09.09, this reverts to 0.50% above Bank of England base rate (currently 6.25%) for the life of the mortgage following two years continuous payment.
• Maximum LTV 85%
• Minimum loan £50,000 and maximum £500,000
• Arrangement fee of 1%

Jon O'Brien, head of intermediary lending at Newcastle Building Society, said: "This is a new exciting venture for the society and is an excellent extension to our Introducer portfolio. Our offset mortgage is extremely popular and has been targeted at the prime market previously, however this new product will allow near prime borrowers to benefit from all the advantages an offset account can provide.

“After two years of continuous mortgage payments, once their credit record is repaired, the borrower is automatically reverted to a prime rate product, without the need to remortgage.

"We value the involvement of Praxis who have been instrumental in supporting us through the process and we now look forward to working with them in the future on this and other projects"