Offset Mortgages

• What is an Offset mortgage?
• How are my mortgage & savings combined?
• Have up to three offset savings accounts linked to your Accord offset mortgage
• How do offset benefits work?
• What is the equivalent savings rate?
• How do I transfer, deposit & withdraw funds using my Offset savings account?

What is an Offset mortgage?

An Offset mortgage is a way of linking your mortgage with your savings. The way it works is simple. By moving some of your savings into a special Offset savings account, instead of earning interest your savings reduce the amount of interest you pay on your mortgage.

With an Offset mortgage, you can combine your mortgage and savings to make your money work harder. You have the option to either reduce the cost of your current payments, to reduce your payments in future years, or to pay off your mortgage sooner.

Your Offset mortgage and Offset savings accounts remain separate, so you still have access to your savings, but your savings reduce the interest charged on your mortgage. You decide which option you'd like when you first take out your Offset mortgage and you can change this at any time during the life of your mortgage simply by contacting us.

How are my mortgage and savings combined?

Your Offset mortgage account and your Offset savings account remain separate, so you'll always have access to your savings. However, they are linked because you only have to pay interest on the difference between the amount in your savings and the amount of your mortgage. This means that the more you save, the less interest you'll pay on your mortgage.

Have up to three separate Offset savings accounts linked to your Offset mortgage

You can have up to three separate savings accounts linked to your Offset mortgage - meaning you can you keep your savings separate should you wish to do so.

For more information, please read our Offset – How it works guide >

Important Note:

The Offset Terms allow for the introduction of an Offset Plus facility under which family members and friends can open an Offset savings account linked to the mortgage. This facility has not been introduced and is therefore not available.

Try our Offset calculator >

How do offset benefits work?

Before your mortgage starts, choose ONE of the three benefit options below. You're free to change your mind at any time in the future.

Option 1: Reduced current payments

Benefit from lower mortgage payments now, but keep the same mortgage term.

Option 2: Reduced payments in future years

Benefit from lower mortgage payments every time your account is reviewed annually, but keep the same mortgage term.

Option 3: Reduced term*

Benefit from paying off your mortgage quicker, but keep your monthly payments the same.

*Please note: If you wish to use offsetting to pay your mortgage off quicker (Option 3) then you will need to contact us, once your mortgage has completed, to register a static (fixed) payment. Otherwise at Account Review your payments will be recalculated every year (Option 2) rather than reducing the term of your mortgage.

Our offset option guide provides more information about the 3 options available to you.

To help you understand how the Accord Offset mortgage could benefit you, please read our case studies guide >

What is the equivalent savings rate?

In effect, the money in your savings account will achieve the equivalent rate that you are being charged on your mortgage. This is because although no interest is earned on your savings, the interest on your mortgage is only charged on the difference between your offset mortgage balance and your offset savings balance.

With traditional mortgage and savings products you usually pay a higher rate of interest on your borrowings than you receive on your savings. If you're a taxpayer, you may also pay tax on the interest that you earn on your savings.

With an Offset mortgage, the balance on your savings account is taken into consideration before we calculate the amount of mortgage interest payable. This means you'll reduce the interest you pay, which is equivalent to your savings achieving a benefit at the mortgage interest rate, with the added advantage of tax efficiency - you don't pay any tax on your savings because you don't earn interest on them.

Here's an example:

• On a 4.00% 2 year fixed rate Offset mortgage* a basic rate tax payer would need to earn 5.00% AER† from a savings account to achieve the same benefit
• Higher rate tax payers would need to earn earn 6.67% AER†
• And for additional rate tax payers this would be 7.27% AER†.

Try our Offset calculator >

For more information about your Offset savings account, please read our Opening and Operating your Offset savings account factsheet >

How do I?

• Pay cheques into my Offset savings account?
• Transfer money from my Offset savings account to my Accord mortgage account?
• Make a cheque withdrawal?

  Print and complete our Request to withdraw/invest/transfer form > and send this to the Customer Service address on the form.

Important information about making payments into your Accord Offset savings account:

• By CHAPS – use sort code 56-00-36 account number 28512081 and quote your Offset savings account number as the payee reference.
• By BACS or Faster Payments – use sort code 62-29-33. For the account number please quote the first 8 digits of your Offset savings account number. The payee reference is your full 10 digit Offset savings account number.
• By Cheque – make your cheques payable to either your own name or, 'Accord Mortgages A/C' followed by your name and your Offset savings account number. Send your cheque to: Accord Mortgages, Customer Service Centre, Admin Dept, Yorkshire House, Yorkshire Drive, Bradford BD5 8LJ.

Making withdrawals from your Accord offset savings account

• To withdraw money from my Accord Offset savings account by Faster Payments, first print and complete our Registration form. Then complete our Request to withdraw/invest/transfer form and send this to the Customer Service Centre address on the form.
• To withdraw by cheque please complete our Request to Withdraw/invest transfer form and send to the Customer Service Centre address on the form.
• To withdraw by CHAPS please complete our CHAPS request form and return along with 2 forms of ID, to the following address:

Accord Mortgages, Customer Service Centre, Admin Dept, Yorkshire House, Yorkshire Drive, Bradford, BD5 8LJ.
There is a fee of £23.50 for any withdrawals via CHAPS and we will need to contact you by telephone to verify your identity.

Please Note

The example used on this page assumes that basic rate taxpayers pay 20% tax, higher rate taxpayers pay 40% tax and additional rate taxpayers pay 45% tax on savings interest and are based on current HM Revenue & Customs rules which are subject to change.

* Product used for illustrative purposes only and may not be available at time of application.

† AER stands for Annual Equivalent Rate and shows you what the interest rate would be if interest was paid and added each year. This will enable you to compare more easily the return you can expect from your savings over time.