Offset mortgages

With an offset Mortgage, you can link your first direct 1st Account balances and day-to-day savings balances to your mortgage - so you only pay interest on the difference.

Our current standard variable offset Mortgage rate is 3.69%. The overall cost for comparison is 3.8% APR. A higher rate tax payer would currently have to earn 6.33% AER from a savings account to achieve the same benefit as offsetting savings against our offset Mortgage standard variable rate. The equivalent rate for standard rate taxpayers is 4.71% AER and 3.75% AER for non taxpayers. You can offset any amount up to the balance of your mortgage.

• for example, if you have an outstanding mortgage of £100,000 and savings of £10,000, you would only pay interest on a mortgage of £90,000. And because you're using your 1st Account, Everyday Savings Account and Savings Account balances to reduce the amount you owe on your mortgage, rather than earning credit interest, there's no tax to pay.
• the amount of interest you pay each month is likely to vary, as it's linked to your fluctuating balances
• you can also transfer other borrowing into an account linked to your mortgage. Or you can redraw capital at any time, up to 75% of the value of your property. This will increase your interest payments and could increase the time it takes to pay off your mortgage. Any borrowing linked to your offset Mortgage will also be secured against your property.
• you must, however, ensure that your monthly interest payments are met.

By offsetting your savings against your mortgage, you can pay less interest on your mortgage and enjoy the flexibility of instant access to your money. Get set to make your savings work harder.

• the ultimate flexible mortgage
• offset your 1st Account, Everyday Savings Account and Savings Account balances to reduce the cost of your mortgage
• make unlimited overpayments
• variable and fixed rates available - see our latest mortgage offers
• pay no tax on your savings - the higher your tax band, the more you stand to benefit.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.