Offset mortgages
How much can you borrow?
Unless stated otherwise on the product information page, you can borrow up to 90% of our mortgage valuation of the property or the purchase price (if applicable), whichever is lower (providing we approve your application).
An Offset Mortgage from Norwich and Peterborough could help you pay your home loan off sooner.
Here's how it works:
With a Norwich and Peterborough Offset Mortgage, instead of you earning interest on the balance you hold in your N&P Offset Savings Account and/or Gold Current Account, the amount that you hold in these accounts is ‘offset’ against your mortgage balance, and so you will only be charged interest on the difference. However, the actual mortgage repayment that you make each month will be based on your total mortgage balance, rather than on the net difference between this and your savings and/or current account balance, which means that you pay off more of the outstanding capital each month (and which could mean paying off your mortgage early).
For example, if you had a 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 for repayment mortgages, could even knock years off your mortgage term.
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. 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.
Your Offset mortgage can move with you
Many of our mortgages are portable. This means that if you move home, you can have a mortgage on your new home on the same terms, providing that your new home is a satisfactory security for the loan, is situated in either England or Wales and that your financial position meets our criteria at the time.
Free valuation
Because we need to know how much your property or the property you want to buy is worth, we will pay for a valuation as part of some of our mortgages. Check our product information page for more information.
If you want a Homebuyer’s Report or a Full Structural Survey, either can be completed at the same time as our mortgage valuation, but you’ll have to pay for this additional service. If a second valuation is required, any additional fees incurred will have to be paid by you.
Payment holidays and underpayment options
We try to make our mortgages as flexible as possible for you. We know that sometimes you may want to pay more than the standard monthly repayment, and you can with your N&P mortgage.
Overpaying can also make it possible for you to underpay on occasions – or even skip a few payments completely. You can exercise either option providing you have made enough overpayments to cover the payment holiday or the underpayment(s).
Free legal fees or £200 cashback
We offer free legal fees or £200 cashback on some of our mortgages. This means that if you’re remortgaging and use a conveyancer selected and instructed by us, we’ll pay the legal fees. Or if you’re buying your home we’ll send you a cheque for £200 on completion (unless stated otherwise on the product information page).
Our charges
A Product fee will be added to your mortgage account on completion. If you choose not to arrange your buildings insurance through us, or if you arrange it through us and subsequently cancel the policy, a fee will be charged.
Pay off your Offset mortgage early
With an Offset Tracker Rate, you can pay off your mortgage whenever you want and there’s no early repayment charge.
If you choose the Offset Fixed Rate, you can repay your mortgage whenever you want, but an early repayment charge may be payable if all or part of the loan is repaid during the early years of the mortgage term. The charge will be calculated using the interest rate that applies when the loan is repaid. See our product information page for more information on early repayment charges.
Minimum advance
The minimum advance on offset mortgages is £50,000.
Addditional borrowing
If you need to borrow more at a later date after taking out your offset mortgage and you would like the additional borrowing to also benefit from the offset facility, you will need to open a new N&P Offset Mortgage for your further advance. You will also need to open a new Offset Savings Account and/or Gold Current Account for your additional borrowing amount. Alternatively, you can take out a further advance that remains separate from the Offset Mortgage that you have for your main advance.