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Offset Mortgage Terms & Conditions


Please read carefully before applying.


Offset Interest Adjustments
At no time will any interest be paid on the Savings element of the Offset Account, irrespective of the balance.
An interest credit will be applied at the close of business on the last working day of each month to the Mortgage element of the Offset Account. This interest credit will be calculated on a daily basis and will be equivalent to the interest charged on the proportion of the loan outstanding that is equal to the balance in the Savings element of the Offset Account.  However, if on any day the amount invested in the Savings element exceeds 50% of the mortgage balance, no interest credit will be applied in respect of the excess.

The interest credit will be applied in any month in which the Savings element has a credit balance, unless the Mortgage is redeemed in that month, in which case there will be no such interest credit.

The credit will be applied to the sub-account of the Mortgage element of the Offset Account that has the highest balance at the time of the advance. In the event of full repayment of this sub-account, or if the credit would result in the sub-account having a credit balance, the credit will be applied to the sub-account that has the highest balance at that time.

Calculation of the minimum monthly payment of the Offset Mortgage
The minimum monthly payment which you are required to make will be calculated on the balance outstanding on the Mortgage element of the Offset Account without any adjustment for any credit balance held in the Savings element.

Savings Element of the Offset Account
The Savings element of the Offset Account will not be opened until the Mortgage has been completed and can only be linked to the Mortgage element of the same Offset Account.

The Savings element of the Offset Account must be in the same name(s) as the Mortgage element and, in the case of a joint Offset Account, both elements must have the names in the same order. Both elements must have the same address for correspondence.

In the event of any borrower ceasing to be a party to the mortgage or a new party being added, the Savings element of the Offset Account must be closed, in which case there will be no interest offset to the Mortgage element until a new Savings element has been opened in the name(s) of the remaining and any new party to the Offset Account.

Termination of the Offset Interest Credit
If there is any breach of the Mortgage Conditions or the terms of the Mortgage Offer, or of the terms and conditions relating to the Savings element of the Offset Account, the Society can, on giving reasonable notice, terminate the interest credit and, at its discretion, charge interest on the Mortgage element at the Society's Standard Variable Rate.

Statements for your Offset Account
Following the end of the Society's financial year on 31 December, you will be provided with a statement for the year showing the transactions on the Mortgage element of your Offset Account. Transactions on both elements can also be accessed via our Online service.

Further borrowing on your Offset Account
You will not be able to increase the amount borrowed on the mortgage element of your Offset Account, but the Society will consider further advance applications on other products.

Closure of the Savings Element of the Offset Account
The Society can close the Savings element of the Offset Account at any time and without notice, repay any credit balance to you or, at our discretion, transfer the balance to a Market Harborough Building Society Easy Access savings account, in any of the following circumstances:

a)  If you, or in the case of joint account holders, any of you, ask us to do so,

b)  If the advance and all other monies owed on the mortgage account have been repaid,

c)  If the borrowers on the Mortgage element of the Offset Account are different from the persons named on the Savings element, or are in a different order,

d)  If there is any change in the Law, or to any Code of Practice, or to HM Revenue & Customs practice or interpretation, or in the requirements of the Financial Conduct Authority or any other regulatory body, or there is a decision of any Ombudsman, as a result of which the Society is required to deduct or account for Income Tax in relation to the Savings element of the Offset Account, or

e)  If for any other reason the Society is prohibited from offering or continuing to offer the Offset Account's offset facility.

Savings Element of the Offset Account - Terms and Conditions
Please read the Savings Account Terms & Conditions before applying.

If any term or condition in this document differs from the Society's general Mortgage Terms & Conditions, the terms and conditions in this document will prevail.

Annual Review of your Offset Account (for Offset mortgage applicants after 24 November 2010)
Each year, on the anniversary of the completion of your Offset mortgage, the Society provides a facility whereby the remaining term of your mortgage can be shortened or extended based on the following:

  • the payment you are making or want to make
  • the debt outstanding
  • any overpayments made during the year
  • any offset credits equivalent to savings interest
  • the current interest rate payable

We will send you a letter before each anniversary of your Offset mortgage to ask that you contact us to discuss your options for the remaining term of your mortgage.

At this annual review you have the option to:

  • change the term of your mortgage
  • reduce or increase your monthly payment
  • fix your monthly payment
  • leave the mortgage unchanged

There will be no fee for this annual review.

All parties to the mortgage will be required to sign to accept any changes to the monthly mortgage payment or term.

If you do not contact us by the annual review date we will leave your Offset account unchanged and the term and the monthly mortgage payment will be unchanged.

It is possible to review your Offset mortgage at more frequent intervals, but there will be a fee payable for more than two reviews in any one year where a change is made (see our Borrowers’ Fees for Additional Services leaflet for the relevant charge).

You may ‘fix’ your monthly mortgage payment to a specific amount each month subject to the Society’s approval. In which case if the rate on the loan changes because of a change to our Standard Variable Rate or Bank of England Base Rate, (either upwards or downwards) it will be your responsibility to advise the Society if the payment due increases beyond your fixed amount to ensure that you do not fall into arrears.

We reserve the right to withdraw the Annual Review facility if you transfer from the Offset scheme to one of the Society’s other mortgage products.

We reserve the right to withdraw this facility if you fall into arrears (two monthly payments or more).

We reserve the right to withdraw this facility if the re-calculated remaining term increases beyond the original end date of the Offset mortgage.

Any rate changes during the year will be taken into account when calculating the monthly mortgage payment due. If interest rates increase, your payment may increase. The payments due will be calculated using any revised term end date previously agreed.

You can return to your original term end date at any time. There may be a charge for this change (see our Borrowers’ Fees for Additional Services leaflet).

We reserve the right to withdraw this facility. We will give you up to 90 days written notice if we decide to do this.

You may elect not to receive the anniversary letter at any time by simply writing to us. All signatories on the Offset mortgage will be required to confirm this.

The Annual Review facility is available to Offset customers who applied before 24 November 2010 subject to written request.  In this case the above annual review terms and conditions will then be applicable.

 
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