Tembo, the ever growing popular mortgage and savings platform, known for its award-winning customer service, has launched a new savings account that rewards you for doing the whole journey with Tembo. And it’s a pretty good one!
You’ll get a boosted rate on your cash savings if you use Tembo for your mortgage. Since you’ll probably be using a mortgage broker anyway (at least you should, to find the best deal from 1,000s of mortgages), this could mean earning some extra interest you might have otherwise missed out on.
The interest rate with the new HomeSaver account is likely to be much higher than anywhere else, especially a high street bank (who typically have low rates). Based on our research, we think this new rate from Tembo is the highest out there.
Currently, with the new HomeSaver account, you’ll get 5.5% AER (meaning earned over a year). This is made up of 2 parts, the first is an underlying interest rate of 3% AER (variable), set at 1.04% below the Bank of England base rate. This means it can go up and down over time (variable).
The second part is the juicy bonus rate of 2.5% AER (fixed) for a year, from when you make your first deposit. This is fixed at this rate, so won’t go up or down. This bonus is unlocked when you get your mortgage through Tembo, and is paid at the end of the 12 month period.
Note: If you don’t end up getting a mortgage with Tembo, you won’t get the bonus interest you have earned, but you’ll still get the tracker rate interest (currently 3% AER (variable)).
Nuts About Money tip: Add as much as you can afford as soon as you can to make the most of the extra bonus.
The HomeSaver account is designed for saving to buy a home or remortgage, not regular withdrawals. You’ll only be allowed 3 withdrawals per year, otherwise you’ll lose the bonus interest (the extra 2.5% AER). And if your balance falls below £1,000 after 12 months, you’ll also lose the bonus interest. However, you'll always get the base rate interest (the 3%), and this is added to your account each month.
There are some limitations, there’s a total limit of £20,000, and it’s not an ISA (individual savings account). This means you might have to pay tax on your interest, which depends on your income (you’ll get a £1,000 interest allowance per year if you earn less than £50,270 per year and £500 if you earn between £50,270 and £125,140. It’s £0 above that. Here’s where to learn more about the personal savings allowance).
You’ll also need to complete on your mortgage with Tembo within 3 years of your first deposit to your HomeSaver account.
Overall, we think the HomeSaver is a really great account. If you’ve got cash in a savings account that you’re building up to either buy your first home or move home, and if you’re planning to buy the home in a few years (between 1 and 3), this could be your best option to park your savings somewhere and get rewarded for all your hard work saving. It seems to be the best interest rate out there (currently 5.5%) so it’s kind of like free money!
That’s as long as you use Tembo for your mortgage advice (and we think you should as they’re pretty amazing). They’ll be able to find the best mortgage deal out there for you, and have excellent customer service. Using a mortgage broker to find the best deal for you, rather than trying to do it yourself, can mean a saving of £100s per month, so they pretty much pay for themselves.
Nuts About Money tip: Never just walk into your bank to ask for a mortgage. They can only provide you with their own mortgages, so it’s very likely you won’t get the best deal for you (there’s 100+ mortgage lenders out there).
And if you are a first time buyer, you can use this savings account alongside Tembo’s Lifetime ISA, which gives you a 25% bonus on your savings (up to £1,000 per tax year) when used towards your deposit for your first home.
If you already have a mortgage and are planning on switching deals in the future (called remortgaging), then the Tembo HomeSaver could also be a great option for your cash savings, as you’ll get the bonus cash when you remortgage with Tembo too. You could save for a year with the HomeSaver account and then remortgage with Tembo and walk away with an extra bonus for yourself, and a great new mortgage deal to go with it!
You can find out more about the HomeSaver on Tembo’s website¹, or by downloading the Tembo app and opening an account. If you want to find out more about Tembo, here's our Tembo review. Thanks for reading!
