Offset Mortgage

Here's how it works:

With our Offset Mortgage, we take into account the balances held in your Norwich and Peterborough Offset Savings or Gold Current Account (or both) when calculating the amount of interest we charge you on your mortgage account. Instead of earning interest on the balances in these accounts, we will off set the balances against the balance of your mortgage account – and only charge you interest on the difference. We will, however, calculate your monthly payment by reference to the actual mortgage balance – the result being that you could could pay off your mortgage early.

For example, if you had a capital and interest (repayment) mortgage of £100,000 and a combined balance of £10,000 across your Gold Current Account and Offset Savings Accounts, we would only charge you interest on the difference of £90,000. We would, however, calculate your monthly payments on the actual mortgage balance of £100,000 with the result that you would pay off a greater amount of capital. This will save you interest and could knock years off your mortgage term.

In short, your mortgage payment is calculated by reference to the actual mortgage balance but interest is charged on the net difference between your mortgage balance and savings amount. You will be required to make a repayment each month irrespective of the repayment type of your mortgage or the balances held in your Offset Savings or Gold Current Account.

If you have a full or part interest only mortgage account then the Offset Mortgage can’t reduce the term because that is fixed.  But, as your monthly repayments will be calculated by reference to the actual mortgage balance,  it could still save you money by reducing the amount of capital that will need to be repaid at the end of your mortgage term.

Key features

  • Can borrow up to 75% of our mortgage valuation of the property or the purchase price (if applicable), whichever is lower, unless stated otherwise on the interest rates schedule
    Linked to Offset Savings Account or Gold Current Account (or both)
  • Payment holidays and underpayment facility once your client has made sufficient overpayments to cover the payment holiday or underpayment(s)
  • The minimum interest rate charged on the Base Rate Tracker will be 3%
  • Rate on the Base Rate Tracker will change within 30 days of a change in Bank Base Rate
  • A fee of £25 will be charged if buildings insurance not arranged through us, or, if arranged through us and subsequently cancelled before it expires.
  • Society's legal fees paid for remortgages when using conveyancers selected and instructed by the Society unless stated otherwise. Conditions apply.

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

More information