Offset flexible mortgage
Royal Bank of Scotland mortgages are available to over 18s. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
What is an offset flexible mortgage?
With an offset mortgage, you can link your Royal Bank savings and current account balances to your mortgage and only pay interest on the difference between those accounts and your mortgage balance.
For example, if you had a £100,000 mortgage, savings of £9,000 and a current account balance of £1,000, you can offset £10,000 and only pay interest on the £90,000.
If you keep the same monthly repayments based on the full amount of your mortgage, the balance will reduce faster - in other words, you could pay your mortgage off earlier.
Whilst offsetting, you don't earn any actual interest on the accounts you link to your mortgage. Your savings are used to reduce (or "offset") your mortgage balance.
What this means is that the effective rate earned on your savings is equal to the mortgage rate - currently 4.25%.
Benefits of an offset flexible mortgage
Link your savings and current account balances to your mortgage
You could save thousands in mortgage interest as your savings balance reduces your mortgage payments
You'll continue to have access to your savings, bear in mind that if you spend them, you'll have less to offset and interest payments will rise.
Offset flexible mortgage at a glance
A mortgage of £116,816 payable on a variable rate of 4.25% for a mortgage term of 15 years would require 180 monthly payments of £878.78.
The total amount payable would be £158,948.40 made up of the loan amount £116,816 plus interest of £42,132.40. A product fee of £499, a valuation fee of £248 and a CHAPS fee of £30 are also payable.
The overall cost for comparison is 4.4% APRC representative. Balances held in linked accounts will reduce the amount of interest payable.
Keeping your money safe
We’re a member of the Financial Services Compensation Scheme (FSCS). Which means the Scheme can pay compensation to you if you’re eligible and we’re unable to pay claims against us.
The compensation limits for mortgage advice and arranging (after 31 October 2004) are maximum £50,000, i.e. 100% of the first £50,000 per person.
For more information, download the PDF below or visit www.fscs.org.uk