About offsetting

Pay less interest with
an offset mortgage

When you use the offsetting feature, rather than earning interest on the money in your Royal Bank current account and savings account, you don't pay interest on the equivalent amount of your mortgage.

Your home may be repossessed if you do not
keep up repayments on your mortgage


Offsetting could save you a lot in interest repayments over the term, and could help you to pay off your mortgage early. Use our offset calculator to see just how much you could save.

With the Offset Flexible Mortgage, all your accounts remain completely separate, so you can manage and spend your money as normal. You choose what accounts to use.

What's more, because you won't earn interest on your current and savings accounts, there's no tax to pay

Business banking customers

If your business is a sole trader or simple partnership, you could use your business current account and savings to offset your mortgage.

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When you take out an Offset Flexible Mortgage, we agree a borrowing limit with you, known as your 'Facility'. It's made up of the money you need to borrow to buy your house, plus an optional 'reserve'.

The total amount can't be more than the value of your property.

You can access your reserve at any time, at the same interest rate as your mortgage, to spend on what you like. Using your reserve will increase the total amount you have to repay.

For example, you could borrow £90,000 to buy your house valued at £110,000, but decide to take out an Offset Flexible Mortgage with a Facility of £100,000. This would leave you the option to borrow up to your Facility at any time, provided you are up-to-date with your mortgage payments.

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Overpay


You can make overpayments by regular amounts or lump sums. It's a great way to save money on interest and pay off your mortgage early. And, unlike some mortgages, there are no penalty charges for doing this.

Even if you don't overpay, offsetting could have the same effect by reducing your mortgage balance.

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Underpay


Would reducing your payments help you manage your money more effectively?

You can request up to six underpayments on your mortgage in any 12 month rolling period. That could help if you're self-employed or have a job that pays commission at different levels throughout the year.

Remember - interest is charged during any period of underpayment and your repayments may increase afterwards.

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Take a break


It might suit you to stop your mortgage payments completely for a while - particularly useful for couples starting a family or people taking time out to study. With our Offset Flexible Mortgage, you can request a complete payment break for up to six months in any 12 month rolling period.

Remember - interest will continue to accrue during any payment break and your monthly repayments may increase afterwards.

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