When you apply for an Offset mortgage you'll also get an instant access Offset savings account.
At the beginning of each month you'll be charged interest on the balance owed on your mortgage and at the same time earn interest on your savings. The interest you earn on your savings will go towards reducing the amount you owe on your mortgage. This is what we call the 'Offset benefit',
so if you have a mortgage of £100,000 and savings of £20,000, you will only pay mortgage interest on the £80,000.
You can choose to use your Offset benefit either to:
Pay off your mortgage early
Use your Offset benefit to reduce the amount you owe on your mortgage whilst you continue with your normal mortgage payments to either:
- reduce the number of years on your mortgage term if you have a repayment mortgage, or
- reduce the amount you owe at the end of the mortgage term if you have an interest only mortgage, or a part interest and part repayment mortgage.
Either way you'll make a saving on your mortgage. Why not use the Offset calculator to see the effect reducing the term of your mortgage could have on the overall amount you owe?
Or, reduce your next normal monthly payment
Use your 'Offset benefit' to reduce your normal mortgage payment easing your budget with a lower monthly mortgage commitment. Remember, if you choose this option your mortgage term and the overall amount you owe won't change.
Your Offset mortgage
Your Offset mortgage works like a normal mortgage. You can choose how much you borrow, the term of the mortgage and how you want to repay it - capital and interest repayment or interest only. We also have a choice of Offset schemes for you to choose from - whether you're moving house or remortgaging.
Our Offset mortgage is completely flexible, so you can make over payments each month, pay off a lump sum whenever you're ready, or apply to take a payment break for up to 3 months (Subject to approval - interest will continue to be added to your mortgage).
Your Offset savings account
You can keep adding to your savings account up to the value of your outstanding mortgage balance or if you need to, withdraw money from your savings whenever you want without notice or penalty. And because the interest you earn on your Offset savings are paid direct to your Offset mortgage you get 100% of the benefit with no tax to pay.
Under current tax rules we can only pay interest tax free on the money you deposit into the account, up to the value of your outstanding mortgage balance.
For further details download our Guide to your Offset mortgage and Offset savings terms and conditions.
Applying for your Offset mortgage
You can apply for your Offset mortgage online. We'll provide you with an online Key Facts Illustration which will detail the exact cost of your mortgage. We'll also give you an instant, online decision in principle so you know where you stand before you go ahead and complete the application form. Just go to the Tool.
Alternatively if you prefer to discuss your mortgage with an advisor before you go ahead, please contact us.