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Helping you pay off your mortgage earlier
Offset flexible mortgage
Your home may be repossessed if you do not keep up repayments on your mortgage
NatWest no longer offer residential interest only mortgages. Customers with existing interest only mortgages are not affected by this change. Buy to Let mortgages remain available on an interest only basis. Please note that our website content is in the process of being updated to reflect these changes.
Pay off your mortgage faster without increasing your monthly payment
Offset flexible mortgage
- Link your savings and current account balances to your mortgage
- Over 18s only
- You could save thousands in mortgage interest: the interest you save reduces your mortgage balance
- You’ll always have access to your savings
Offset mortgage at a glance
| Interest rate | Overall cost for comparison | Product fee |
|---|---|---|
| 4.00% variable | 4.2% variable | £499 |
| Minimum deposit | 20% for capital and interest repayment option | |
| Purpose | Purchase or remortgage | |
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Offset flexible mortgages explained
How an Offset mortgage can help you
With an Offset mortgage, you can link your savings and current account balances to your mortgage and only pay interest on the difference between those accounts and your mortgage balance.
For example, if you had a £100,000 mortgage, savings of £9,000 and a current account balance of £1,000 - you would only pay interest on the £90,000.
Because you continue to make the same monthly repayments based on the full amount of your mortgage the balance reduces faster - in other words, you pay your mortgage off earlier.
All your accounts are still kept separate (you can withdraw from your savings or current account at any time), so it's easy to manage your money online, at your branch or over the phone.
Making the most of your savings
Whilst offsetting, you don't earn any actual interest on the accounts you link to your mortgage. Instead your savings are used to reduce (or "offset") your mortgage balance. What this means is that the effective rate earned on your savings is equal to the mortgage rate - currently 4%.
In addition, because you're not technically earning interest (you're avoiding paying the mortgage interest instead) you don't have to pay any additional tax on your savings income. Depending on your tax band this means your effective savings rate would be:
- 5.00% per annum for a basic rate taxpayer
- 6.66% per annum for a 40% rate taxpayer
- 8.00% per annum for a 50% rate taxpayer
Compare our Offset Flexible Mortgage with a standard mortgage
Helpful tools
Offset Flexible Mortgage Calculator
Find out what offsetting could mean for you and see how much less you could be paying each month if you set your savings against your mortgage.
Frequently asked questions
What people are asking us
Awards
We've won more awards
NatWest has been awarded 'Best Bank for Mortgages' for an impressive 19th time in the past 23 years and
for the 4th year in a row we’ve also won 'Best First Time Buyer Mortgage Lender'.
Best Bank
NatWest
Best First Time Buyer Mortgage Lender
NatWest
New customers 0800 096 9527
Existing customers 0800 092 9585
Customers with hearing and speech impairments can contact us by Minicom number 0800 917 0526
Lines are open:
Service - Mon to Fri 8:30am - 6pm, Sat 9am - 12:30pm.
Sales - Mon to Fri 8am - 8pm, Sat 9am - 4pm. Excluding public holidays. Calls may be recorded.
Offset Flexible Mortgage
Contact us
New customers 0800 096 9527
Existing customers 0800 092 9585
Customers with hearing and speech impairments can contact us by Minicom number 0800 917 0526
Lines are open:
Service - Mon to Fri 8:30am - 6pm, Sat 9am -12:30pm.
Sales - Mon to Fri 8am - 6pm, Sat 9am - 4pm.
Excluding public holidays. Calls may be recorded.
Offset flexible mortgage
Do I have access and still earn interest on my savings?
Do I have access to my savings?
Yes - you can access them whenever you want.
Do I still earn interest on my savings?
Whilst offsetting, you don't earn any actual interest on the accounts you link to your mortgage. Instead your savings are used to reduce (or "offset") your mortgage balance. What this means is that the effective rate earned on your savings is equal to the mortgage rate - currently 4%.
In addition, because you're not technically earning interest (you're avoiding paying the mortgage interest instead) you don't have to pay any additional tax on your savings income.
Offset flexible mortgage
Do my mortgage payments stay the same?
Your mortgage payments will depend on changes in interest rates. Increasing or decreasing the amount of savings that you offset will not change your payments.
If the interest rate goes down, you can:
- Keep your payment amount the same - which will help to reduce the outstanding balance on your mortgage quicker
- Reduce your payments - to match the new rate. There is a minimum monthly payment amount that you cannot go below
If you already pay more than the minimum repayment amount and the interest rates go up, as long as your payment continues to cover the new interest rate, we will not change your payments.
If you take a payment holiday, underpay or take additional borrowing, your repayments may also change.
Offset flexible mortgage
How many current and savings accounts can I include in an Offset Banking arrangement?
You can include one eligible current account and up to three eligible First Reserve savings accounts. With Business Offset you can include certain business current and savings accounts.
Offset flexible mortgage
Can I make additional payments to my mortgage?
Yes. With an Offset Flexible Mortgage you can make additional payments to your mortgage any time and there's no penalty for repaying all or part of your mortgage early.
Offset flexible mortgage
What is a payment holiday?
You can apply to take a repayment holiday. With a payment holiday, you don't need to make any mortgage payments for an agreed period up to six months. This can help ease the financial pressure if you need money for another purpose for a short term. Interest continues to accrue during a payment holiday and will be added to the loan. At the end of a payment holiday your monthly repayments are likely to be higher.
Offset flexible mortgage
What type of current account can I link to an Offset Flexible Mortgage?
You can link a Select, Select Silver, Select Platinum Account, Black Account, Current Plus, The Private Bank Account, Advantage Private, Advantage Gold or Graduate account to an Offset Flexible Mortgage. If you have eligible business accounts, these can also be used.
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