‘Homeowners could avoid bank charges’

Homeowners could escape having to pay for their banking if the industry introduces charges for previously free services, according to a financial product research company.

Defaqto says that offset and current account mortgages could help mortgagees avoid paying banking fees.

This is because the products combine a homeowner loan with a bank account and possibly other financial service as well.

In its report, Defaqto reveals that providers who do not impose charges will potentially be able to save customers around £120 per year.

An assessment of the market reveals 36 providers involved in the offset and current account mortgage market offering a total of 198 products among them.

Three providers (Clydesdale, NatWest and Yorkshire Bank). were found to be offering both offset and current account mortgages.

David Black of Defaqto said of offset and current account mortgages: “They are now increasingly regarded as mainstream products and we believe that providers will start to target new markets such as buy-let investors or those with lumpy income streams.”

The head of the British Bankers’ Association, Angela Knight, caused controversy recently when she appeared on Radio 4’s today programme.

She said that the introduction of charges for previously free banking services was “an inevitable consequence” of regulatory action against penalty charges.

© Adfero Ltd

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