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Intelligent Finance gives you the choice of how you would like to receive the real benefits
of your offset mortgage. There are 3 mortgage payment options to choose from, with the added
benefit of being able to switch between them depending on your changing circumstances over
the life of your mortgage.
The choice is yours:
Shorter term - use offsetting to help you pay off your mortgage early.
Lower payments - use offsetting to make your monthly payment as low as possible.
Reduced debt – use offsetting to reduce the amount you owe without affecting the term of your mortgage.
Here's an explanation of how each of the options work.
Shorter term
This option enables you to reduce the amount of interest paid over the term of
your mortgage and reduce the balance of your mortgage faster. This could result
in your mortgage being paid off early.
Here's how it works:
- As the money in your savings and/or current account offsets against your mortgage, you receive no interest on that money but pay less interest on your mortgage
- However, your monthly payments do not change as a result of offsetting so you're effectively overpaying each month
- The mortgage balance reduces faster and you could pay off your mortgage early
Lower payments
This option enables you to reduce the amount of interest paid over the term of your
mortgage and reduce your monthly mortgage payments, giving you more money to spend each month.
Here's how it works:
- As the money in your savings and/or current account offsets against your mortgage you receive no interest on that money but pay less interest on your mortgage
- Mortgage payments adjust automatically each month depending on the amount in your savings and/or current account, resulting in a lower monthly payment
- Your mortgage balance and term don't reduce as a result of offsetting
Reduced debt
This option enables you to reduce the amount of interest paid over the term of your mortgage,
reduce your mortgage balance, and stick to your chosen mortgage term.
Here's how it works:
- As the money in your savings and/or current account offsets against your mortgage, you receive no interest on that money but pay less interest on your mortgage
- Until a recalculation* occurs, your monthly payments do not change as a result of offsetting, so you're effectively overpaying each month and reducing your mortgage balance
- Each time there's a recalculation*, your monthly payments are adjusted based on your reduced balance, and are spread out over the remaining mortgage term
- After each recalculation* your monthly mortgage payments are less than they would have been had you not been offsetting and your term remains the same
*Examples of recalculation include: interest rate changes, changing from interest-only to
repayment mortgage and taking a payment holiday.
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