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 our Offset Mortgage, we take into account the balances held in your Norwich and Peterborough Offset Savings or Gold Current Account (or both) when calculating the amount of interest we charge you on your mortgage account. Instead of earning interest on the balances in these accounts, we will off set the balances against the balance of your mortgage account – and only charge you interest on the difference. We will, however, calculate your monthly payment by reference to the actual mortgage balance – the result being that you could could pay off your mortgage early.
For example, if you had a capital and interest (repayment) 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 could knock years off your mortgage term.
In short, your mortgage payment is calculated by reference to the actual mortgage balance but interest is charged on the net difference between your mortgage balance and savings amount. 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. But, as your monthly repayments will be calculated by reference to the actual mortgage balance, 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
All 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 reservation 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.