You can offset your savings against your mortgage
Offsetting your mortgage with a Savings account is an effective way to reduce the interest paid on a mortgage.
The Offset Mortgage facility reduces the amount of interest you pay over the term of your mortgage. The money you have in savings is offset against the balance of your mortgage, meaning that you will only be charged on the difference. Your monthly payments are not reduced by holding funds in the Offset account, but results in overpayments being made each month equivalent to the amount of the offset interest.
An Offset facility is available with all Capital and Interest Repayment mortgages at the Society. When taking out a mortgage you will be given the option to open an Offset Savings Account. For example, if you have £15,000 in an Offset Savings Account and a mortgage of £150,000 you would only pay interest on £135,000 of your mortgage balance.
The rate of return on your savings can effectively be higher than if you left the money in an ordinary savings account. Additionally, the term of the mortgage will be shortened unless there is an interest rate change and then repayments will be reduced, as they are calculated on the outstanding balance.
As no interest is paid on your savings there will be no tax liability on the balance of your deposit.
The Offset Savings Account is flexible. You can top up your savings when you wish to take advantage of the facility and you may have up to a maximum of 75% of your loan held in an Offset Savings Account. In addition, you also have the option to make unlimited withdrawals without penalty or notice.
Your home may be repossessed if you do not keep up repayments on your mortgage
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