The Lloyds TSB offset mortgage is available to customers of Lloyds TSB and of Cheltenham and Gloucester (C&G). The offset mortgages are offered through C&G. The Lloyds TSB offset mortgage can be linked to Lloyds TSB savings and current accounts and C&G offset savings accounts. It is available at up to 95 per cent of the property's value, with loan amounts between £25,001 and £1.5 million.
The Lloyds TSB offset mortgage is a tracker mortgage, with the interest rate set 0.9 per cent above the Bank of England's base rate (which is currently 5.5 per cent) for the life of the mortgage. The overall rate for comparison is 6 per cent.
With the Lloyds TSB offset mortgage, mortgage, current and savings accounts remain separate. Existing current and savings accounts can easily be converted to the offset versions of the same accounts. Overpayments are permitted and payment holidays are free after previous overpayments. Instalment breaks are also allowed with the Lloyds TSB offset mortgage, though the bank warns that this might appear on borrowers' credit reports. However underpayments and payment holidays could increase the mortgage term and/or the total amount payable.
Additional fees on the Lloyds TSB mortgage account include:
With the Lloyds TSB offset mortgage, some fees are waived at certain periods for house purchases and remortgages, however borrowers should not count on this, as fee waivers usually apply for a limited time. Lloyds TSB offset mortgage holders who are borrowing 95 per cent to 100 per cent of a property's value and who are switching from another lender with a property under £2 million in value will escape the valuation fee.
The current Buy-to-Let offering from Lloyds TSB is only available in Scotland. A tracker rate at 0.09 % above the Bank of Englands Base rate. There is an arrangement fee of £995 and no valuation fee for remortgage customers. The APR for this deal is currently 6.8% and the tracker rate is offer for the whole of the term of the mortgage.
Lloyds TSB offset mortgages are particularly suited for savers who are higher rate taxpayers, who are self-employed or who get bonuses at work. Lloyds TSB's own illustrations suggest that someone with savings of £20,000 and a mortgage of £100,000 with an APR of 5.7 per cent could save nearly £30,000 in interest over a 20 year term and could repay 3 years and seven months early.
An additional feature of the Lloyds TSB offset mortgage is the ability to link family and friends' savings accounts to get the maximum benefit from offsetting. In addition, the £1,000 overdraft that comes with a Lloyds TSB current account will be charged at the offset mortgage interest rate*.
Availability of high street branches
Must take out a Lloyds TSB current or savings account
Complete control and flexibility
