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SECURITY THROUGH OFFSET - HOW IT WORKS

Although you may want to help financially, you may be uncertain about longer term financial commitments and might not be in a position to hand over money as a gift until the future is clearer.

How can the Family Mortgage help?

Our answer:
The Family Offset Account

The Family Mortgage allows family members to use their savings to help the buyer without having to 'give' the money to them. Money can be placed in a Family Offset Account with us. 

By doing this, you reduce the amount of the mortgage on which interest is charged. So instead of receiving interest on the savings (which is also subject to tax) you are passing on a bigger benefit to the buyer by saving them interest on their mortgage.

Money placed in a Family Offset Account also acts as security for the buyer’s mortgage. This also brings down the interest rate that might otherwise be available.

The information provided is a summary of the key features of the account and is not intended to be a substitute for reading the Product Features leaflet and General Conditions for our Savings Accounts booklet.

Summary box

Account name

 FAMILY OFFSET ACCOUNT (1)

What is the interest rate?

Interest will not be paid on the account but the amount on to which interest is charged to the borrower(s) under the mortgage will be reduced by the corresponding balance held in a Family Offset Account.

Can the Family Building Society change the interest rate? 

    No interest is paid on this account.

    What would the estimated balance be after 12 months based on a £5,000 deposit?

    Opening balance Projected balance (Gross)
     £5,000 £5,000.00
      • No interest is paid on this account
      • Projected balance is at the end of 12 months
      • All projections are provided for illustrative purposes only and do not take into account individual circumstances

        How do I open and manage my account?

          • The Family Offset Account can only be opened by a family member of a Family Mortgage applicant requiring the rate reduction provided by this account
          • The account can only be applied for by post
          • A minimum of £5,000 must be deposited
          • Additions are not permitted
          • The maximum that can be held in the account is a third of the value of the linked Family Mortgage prime security
          • Instructions for the account can only be made by post

          Can I withdraw money?

            • Withdrawals or account closure are only available following a review of the linked Family Mortgage. Please refer to the 'Family Offset Account terms' section of the Product Features leaflet for more information

            Additional information

            This account is only available in conjunction with a mortgage.
             
            This issue may be withdrawn at any time without prior notice.
            All financial information correct on 11 September 2018. 

            Things to remember

            Family members providing financial support should be aware that if the buyer is unable to meet the mortgage payments, the security they have provided is at risk if the property needs to be sold and there is a shortfall.

            However, during the first 10 years we do provide the buyer with important protection by automatically meeting the buyer’s mortgage payments for up to six months on a one-off basis should they become unemployed through no fault of their own.

            What next?

            You probably have a lot of questions about how the Family Mortgage could work for you - we are here to help! If you're in a bit of a rush but would like to know more, you can complete a 'Four Quick Questions' form here.

            Find out more about the other Family Mortgage options:

          • How it works - Security Through Property
          • How it works - Security Through Savings 
          • Return to the Family Mortgage home

          • You can use one, two or all three of these methods in combination to help a buyer get the home they want.

            Representative example
            A mortgage of £201,680.00 payable over 35 years initially on a fixed rate for 3 years at 2.99% and then on our variable Managed Mortgage Rate, currently 5.04%, for the remaining 32 years would require 38 monthly payments of £775.04 and 382 monthly payments of £1,003.42, plus one initial interest payment of £513.46.

            The total amount payable would be £414,145.42 made up of the loan amount plus interest £211,591.42 and an application fee of £175, a product fee of £599 and a mortgage exit fee of £100.

            The overall cost for comparison is 4.7% APRC representative.  

            THE MORTGAGE WILL BE SECURED ON YOUR HOME

            YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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            Family Building Society
            Ebbisham House
            30 Church Street
            Epsom
            Surrey KT17 4NL
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