With an offset Mortgage, you can link your current account balances and day-to-day savings balances to your mortgage - then you only pay interest on the difference. For example, if your outstanding mortgage value was £100,000 and you linked a savings account to this, which had a balance of £10,000, you would only pay interest on £90,000 of your mortgage. And because you will be using your other current and day-to-day account balances to reduce the amount you owe on your mortgage, and not earning credit interest, there's no tax to pay.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Please call us on 08 456 100 100.
There is a one-off arrangement fee which will be payable at the time of drawdown to cover the costs of setting up your variable offset Mortgage. An arrangement fee may not be required depending on the rate chosen - see our latest fixed and variable offset Mortgage offers for full details. In addition to an arrangement fee, booking fees will be payable for fixed rate mortgages. This will vary depending on the offer available - see our latest fixed and variable offset Mortgage offers for full details. If you close your account within a fixed rate period, an early repayment charge may be applied.
Other fees may apply:*
* The fees below may not always apply and depend on the rate chosen - see our fixed and variable offset Mortgage offers for further details.
If you are transferring your mortgage to first direct from another mortgage provider, they may charge an early repayment charge if you are moving during a fixed rate or "tied–in" period.
You will need to pay the interest due each month and you must have an acceptable type of repayment vehicle in place to repay the capital borrowed at the end of your agreed mortgage term.
Most of our customers choose to repay their offset Mortgage as they would on a traditional capital repayment mortgage. They do this by setting up a regular standing order from the 1st Account to the mortgage. Alternatively, you can arrange a repayment vehicle such as an ISA or an endowment policy to repay your mortgage. You are responsible for reviewing your mortgage payments to reflect any changes to the interest rate.
For offset Mortgages we'll consider loans up to 75% of the value of your home, depending on the amount borrowed and on your personal circumstances (see tables below).
| Amount* | 75% maximum LTV mortgage | 65% maximum LTV mortgage |
|---|---|---|
| Under £1 million | 75% | 65% |
| £1 million - £2 million | 65% | 65% |
| Above £2 million | 50% | 50% |
* The maximum amount you may be able to borrow can differ depending on the rate chosen - see our latest fixed and variable offset Mortgage offers for full details. For comparison, on our Repayment Mortgage we will consider loans up to 85% of the value of the property depending on the amount borrowed, the product you have selected and your personal circumstances. See our latest fixed and variable Repayment Mortgage rates for further details.
| Amount | Maximum LTV |
|---|---|
| Under £1 million | 75% |
| £1 million - £2 million | 65% |
| Above £2 million | 50% |
To find out how much you can borrow, please call us on 08 456 100 103 if you are an existing customer and 0800 48 24 48 for new customers.
This will depend on how much you're looking to borrow, how long for and how much money you hold in current and day–to–day savings accounts to offset against your mortgage. For a quick estimate of your monthly payments visit the calculator.
To open an offset Mortgage, you'll need to:
It's also important that you're aware of the following points:
Interest is calculated daily – you only ever pay for what you owe at the end of each day. So any money in any of your accounts linked to your mortgage saves you interest – this could save you thousands of pounds over the lifetime of the account.
If you opt for a fixed rate mortgage, you will be charged an early repayment charge if you repay the whole mortgage during the fixed rate period.
You will be charged a closure administration fee of £149 whenever you repay your mortgage except when you transfer to another first direct mortgage.
If you take a fixed rate mortgage and you repay the whole of your mortgage during the fixed rate period, an early repayment charge will apply. This charge is calculated at 3% of the original mortgage amount during the first year of the fixed rate period and 2% of the original mortgage amount if the mortgage is closed in any subsequent year during the fixed rate period. If you close the mortgage after the fixed rate period has ended, no repayment charge will apply.
The amount of any early repayment charge will be displayed on both your Key Facts Illustration and Mortgage Offer, which you will receive should you decide to progress with a mortgage application.
We do not currently offer capped or discounted rates. However, fixed and variable rates are generally available on either first direct's offset Mortgage or Repayment Mortgage. See our latest fixed and variable offset Mortgage offers or our latest fixed and variable Repayment Mortgage offers for more information.
You will need to pay the interest payment each month, however you must review your repayment plan regularly to make sure it is still on track to repay any outstanding capital in full by the end of term.
Yes, you can make unlimited overpayments to your offset Mortgage to reduce the capital. You must still repay the interest due each month and repay your mortgage in full by the end of the agreed term. By overpaying it will have the added advantage of immediately reducing the monthly interest you pay on your mortgage, and could help reduce the term of your mortgage. If you take a fixed rate mortgage and you repay the whole of your mortgage during the fixed rate period an early repayment charge will apply.
When you take out an offset Mortgage, we will be pleased to discuss any additional borrowing requirements you may have. Any additional borrowing taken at the same time as the offset Mortgage is charged at the same rate as your offset Mortgage. Any additional borrowing taken at a later date will be at the current rates available. We call any additional borrowing an 'offset Loan'. Any offset Loan amount will be secured on your home.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
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