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Your guide toOffsetmortgages

If you want to pay off your mortgage sooner or reduce your monthly payments, linking your savings and mortgage can help make it happen.

Offset mortgages put simply

What they are and what they do

The idea behind an offset mortgage is simple and straightforward. By linking your mortgage and your savings, you can bring down the cost of your loan. This is because rather than earning interest, your savings reduce the amount of interest you pay on your mortgage. In other words, the more you save, the less interest you’ll pay on your mortgage.

Here are the key benefits of an offset mortgage:

  • Choose to reduce your monthly payments
  • Choose to pay off your mortgage sooner
  • Link up to 3 offset savings accounts
  • Make overpayments whenever you like without incurring an Early Repayment Charge
  • Make underpayments (with our agreement, as long as you've already made overpayments)
  • Benefit from great equivalent savings rates  on your savings

How your mortgage and savings are combined

Your offset mortgage account and your offset savings account remain separate, it's just that they're linked. This means that as well as having access to your savings, you benefit by only paying interest on the difference between the amount in your savings and your mortgage amount.

The way offset benefits work

Choose ONE of the three benefit options below before your mortgage starts. You can easily 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.


Understanding the equivalent savings rate

The money in your offset savings account benefits from the equivalent rate that you are being charged on your offset mortgage. You don’t earn any interest on your savings, but you only have to pay interest on the difference between your offset mortgage balance and your offset savings balance.

You’ll find the equivalent savings rates for each offset product on the individual product description pages. These are based on the current interest rate for each mortgage product. Where the rate of your offset mortgage is variable or reverts to a variable rate after an initial fixed rate period, the equivalent savings rate will change when the relevant mortgage rate changes.

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 a Chelsea Building Society 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 - and you won't have to pay tax because your savings won't be earning any interest.

Our Offset Savings Account is an instant access savings account linked to your Offset Mortgage – if you have an Offset mortgage you have the option to open one of these accounts.


Our latest offset mortgages

Whether you're a first time buyer or already have a mortgage, looking for a fixed rate or a tracker option, we have an offset mortgage to suit you.

Work out how you might save money

Use our offset calculator to see how you could pay off your mortgage sooner and save money.

Takes less than 2 minutes to complete


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Mortgage calculators

Use our simple calculator tools to work out how much your repayments could be, how much we could lend to you and if an Offset mortgage could save you money.

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