Natwest offset mortgage (A complete guide)

In this brief blog, we are going to discuss the Natwest offset mortgage and how to get the Natwest offset flexible mortgage.

What is the Natwest offset mortgage?

A Natwest offset mortgage is a mortgage where your savings are used to reduce the amount of interest you pay on your mortgage.

A Natwest offset mortgage works by linking your Natwest savings account to your Natwest offset mortgage.

How does an offset mortgage work?

Interest is charged on the difference between your mortgage capital balance and the amount in the offset savings account.

 The more you deposit in a savings account, the less interest you have to pay. You can withdraw the funds from your savings account at any time as there is no lock-in period. Withdrawing money from your offset savings account will, of course, increase your interest payments on your mortgage.

The funds in the linked account can be deposited by friends of family.

A Natwest offset mortgage can help you;

• Pay your mortgage off quicker
• Reduce your monthly payments now or in the future

Is a Natwest offset mortgage right for you?

It is worth getting mortgage advice before choosing a Natwest offset mortgage from a qualified digital mortgage broker.

Is an offset mortgage worth it?

Yes, an offset mortgage may be worth it if you are able to put enough savings into your linked savings account and essentially reduce how much interest you pay on your mortgage and how quickly you pay off your mortgage.

Can you still get offset mortgages?

Yes, you can still get offset mortgages. Some UK mortgage lenders still offer these types of mortgages.

Can you withdraw money from an offset account?

Yes, you can withdraw money from an offset account but it will likely increase the interest you are paying on your mortgage. This depends on when you withdraw the money and if you put it back into the account. You should check with Natwest if you aim to return funds to your mortgage account before interest is charged.

The key features of the Natwest mortgage are

You can use your savings and current account balance to reduce your interest repayments.

The Natwest offset mortgage takes into account any amount that is in your savings account or current account with Natwest.

This means if you have a mortgage balance of £200,000, £10,000 in your current account  and £50,000 in your savings account you will only be charged interest on a mortgage balance of £140,000

You will likely not be able to get this mortgage for business purposes or Buy to Let property.

You can choose to make overpayments on the mortgage whenever you want to. You can do this regularly each year, each month or you can make lump sum overpayments. Early Repayment Charges may apply so check first.

You may be able to borrow back any capital which you have paid back but this may increase the amount of interest you are charged and potentially increase your mortgage term. 

You must also ensure you can pay any money you redraw from your mortgage by the end of the mortgage term.

How much you may benefit from a tax point of view will depend heavily on your individual circumstances.

Any borrowing linked to your Offset Mortgage will be secured against your property.

The Natwest offset mortgage currently has a product fee of £499.

It can be obtained as an interest only or capital repayment mortgage.

You won’t earn interest on the savings and current accounts linked to your Natwest offset mortgage.

You can find more information on the Natwest offset mortgage here.

You can use an offset mortgage calculator to see what your potential monthly mortgage repayments could be.

How to apply for the Natwest offset mortgage

Telephone

If you are a new mortgage customer you can apply for the Natwest offset mortgage using the telephone.

When you call you will need your income and expenditure details to hand in order to go through a mortgage fact find over the phone. You will then be given a mortgage or agreement in principle over the phone and the details will be emailed over to you.

To make a full mortgage application you will need some supporting mortgage documents.  A list of required mortgage documents will be sent to you via email.

Once you have sent these documents a telephone appointment will be set up for you to make a full mortgage application.

The number to call to start your mortgage application is 0800 096 9527 during normal business Opening hours

Next Generation Text Service: 18001 0800 096 9527

Recently applied or existing offset mortgage customers

Call Natwest mortgages  on 0345 300 4012 during normal opening  Opening hours

Next Generation Text Service: 18001 0345 300 4012

Online

You can also make your Natwest offset mortgage application online.

You can also apply for your Natwest offset mortgage by making an application through the website. 

When you apply via the website you won’t get mortgage advice. This means that the suitability of the mortgage you choose won’t be accessed and you won’t have the regulatory protections provided for those who apply via phone.

During your online mortgage application, you will be required to provide information on all the money which you earn and on your monthly expenses.

Use a mortgage broker for your mortgage in principle

You may want to use an independent mortgage broker to help you get a mortgage on your new home.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.

This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.

In this brief guide, we discussed the Natwest offset mortgage. If you have any questions or comments please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.