RS: The interesting thing about offset for me is whether it’s seen by people who have them and sell them as a product that should be revisited on a regular basis. SC: It’s an easy one to give you an in to revisit with the client on a regular basis. You can agree a timescale with clients of say three to six months that allows you to keep them up-to-date with the market. You then have a conversation that can open up opportunities with friends and family. It’s a great way of getting referrals and keeping in touch. RS: Where brokers can service clients on a running basis may be where they can justify charging an ongoing fee. DF: Thinking back to the old days I had conversations with brokers who were no longer selling offset and one of their key reasons was because they felt they couldn’t go back and revisit the client. It wasn’t like a 2-year deal in that respect. If that perception has changed that’s fantastic. SC: It very much comes down to educating brokers. Advice is not just a one-stop-mortgage-shop anymore. It’s become about an ongoing business relationship. Without that brokers won’t survive. I think the penny is dropping in a few places across the country but not in as many as perhaps it should have. SL: The type of broker who gets hooked on offset is the type who would see the opportunity to go back to the client. MF: We seem to get more referrals from offset clients. Even if you think you might lose a client if you put them on a lifetime deal you don’t because you can revisit it, but you have to consider those referrals as well. DH: The suite of offset products has also developed. It’s not all lifetime trackers; you can get fixed rates now. That was an
important move for offset to widen its appeal and it also prompts the need for brokers to revisit those borrowers on that basis as well. Lenders are competing for offset so that’s a talking point for brokers but also there’s a conversation to be had with borrowers about whether they’re using the offset facility. If they aren’t it becomes an expensive product. DF: From our perspective the greater the balance in the offset account the better – the more capital goes into the business, the more we can do with it. We were quite surprised when we took a random sample of our offset deals and found that quite a high proportion of offset mortgages had nothing offsetting them. When we looked into it further we realised that a lot were using them as reserve facilities and drawing up and down but there were still a number of borrowers there who had no balance. MF: I think we need more products. I checked on Trigold yesterday and only 10% of products had the term offset. Most lenders have a few but I think the Beverley is perhaps the only one that has offset available on all its products. I’d like to see offset across the range from more lenders. It wouldn’t solve the problem of selling more offsets but it would get the ball rolling.
some lenders oFFer Family oFFset where Parents’ savings can helP children get on the ProPerty ladder. what are the beneFits? SL: Woolwich has traditionally been good at making complex products seem fairly straightforward. I think there’s a market for enabling parents to use their savings simply to boost their kids on affordability. DF: We used to have the offset together
OFFSET AN IDEAL TIME
Bank of England base rate remains low, savings are topical – this could be the right time to consider Offset for your clients. For intermediaries only
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www.woolwichintermediaries.co.uk 31/03/2011 12:47
mortgage introducer APRIL 2011 41
mortgage where parents’ savings would help their child’s mortgage loan to value be seen to be lower when their capital is taken into account. In the past it wasn’t very popular but I can see that it may be more popular now. First-time buyers are struggling to get on the property ladder in today’s market and we should be thinking about how we can help them. Bank of mum and dad are doing an awful lot at the moment but from a personal point of view with two kids
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