A GUIDE TO YOUR OFFSET REPAYMENT MORTGAGE

With a repayment mortgage the amount that you pay each month is used to pay off the interest charged to the mortgage for that month
plus some of the original amount borrowed by you (the capital). This means your capital is reducing each month and, at the end of your
mortgage term, you will not owe any further money to us, assuming all payments have been made in full and on time throughout the
term of your mortgage.
Your Offset mortgage consists of two accounts, an Offset mortgage account and an Offset savings account. The savings held in your
Offset savings account are linked to your mortgage account and used to reduce the amount of mortgage interest you pay (this is called
the Offset benefit). This means that, alongside your monthly capital payment, you only pay interest on the difference between your
mortgage and your savings balance.
The more you save in your Offset savings account, the less mortgage interest you pay. However, if your Offset savings balance is
greater than your Offset mortgage you will not receive any benefit on the excess amount. If you have the same amount in your Offset
savings account as the amount you owe on your mortgage, you will still need to make a capital repayment each month. Interest is
calculated daily and you must have savings in the Offset savings account to receive the Offset benefit.
When you set up your Offset mortgage you have two options of how to use the Offset benefit:
reduce the overall term of your mortgage (i.e. the number of years and months over which it will be paid back), or
reduce the monthly mortgage payment.
Your advisor will be able to give you detailed information regarding your specific Offset benefit options, and how they would affect your
mortgage term or payments, however, a brief explanation of each is given below.
Reduce the overall term of your mortgage
By choosing this option, you continue to make the full contractual monthly mortgage payment each month. Any Offset benefit
immediately reduces the outstanding capital balance. This in turn reduces the amount of mortgage interest you must pay overall, and
therefore shortens the time it takes to pay off the mortgage. The amount saved and therefore the actual difference to your mortgage
term and overall cost, will vary depending on the amount of money you put into your savings account.
Under this option your monthly mortgage payments are only recalculated following a significant change to your mortgage, for
example, as a result of a rate change.
Reduce the monthly payment required
At the end of each month the Offset benefit automatically reduces the amount we will collect by Direct Debit for the next monthly
mortgage payment (or the month after that, depending on when the payment is due) by the same amount. This means that although
you will still pay your mortgage for the whole of the original term, you will pay a reduced amount each month. However, if there is an
increase in the interest rate payable on your mortgage this may result in your monthly payment increasing.
Payments made before the 7th of the month may result in the Offset benefit reducing your monthly payment a month later.
Please note, by choosing the option to reduce your monthly payment you must pay by Direct Debit.
Overpayments
There are a number of different ways to make overpayments on your Offset mortgage such as small adhoc overpayments, larger
lump sum overpayments and regular overpayments. If you would like more information just call our Customer Service Centre on
0845 7665522 to discuss which option is best for your individual circumstances.
You cannot withdraw overpayments once they have been paid into your mortgage account yourself.
Operating your savings account
Although we will open your Offset savings account upon completion of the mortgage, we will not automatically transfer any Direct
Debits, standing orders or funds into it from any other savings account you may have with us, so you will need to transfer any funds
and set up any Direct Debits or standing orders required on this account.
You can find all the information you need on security (including operating your savings account online and applying appropriate online
security), making a deposit and making a withdrawal, in your booklet Offset savings account terms and conditions which is supplied
to you with your mortgage offer documentation. If you would like a copy of this booklet please phone us on the number overleaf or call
into your local branch.
If your Offset savings balance is greater than your Offset mortgage you will not receive any benefit on the excess amount. You may
wish to move the excess amount from your Offset savings account into an account that gives you interest on your savings. We would
recommend you review your situation and seek financial advice.
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Transferring your Offset mortgage
If you have transferred (ported) your Offset mortgage to another property, a new Offset savings account will be set up on completion.
You will need to confirm if existing standing orders and Direct Debits are to be cancelled or moved to the new savings account, as we
are unable to do this without your permission. You will also need to arrange to transfer any funds required to the new savings account
as we are unable to do this automatically. Once your mortgage has been repaid, transferred to another property, or transferred to a
non-Offset mortgage product, your original Offset savings account will change to an instant access account.
Important information
Your advisor will be able to take your individual circumstances into account and give you detailed information regarding your specific
Offset benefit options and how they would affect your mortgage term or payments. All of the information given is subject to our lending
criteria and the specific terms and conditions of your mortgage product.
For further details, call into your local branch, visit us at
thecoventry.co.uk
or call our Customer Service Centre on
0845 7665522
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Coventry Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority
(firm reference number 150892 www.fca.org.uk).
The information in this leaflet is provided for your information only and should not be taken as advice. Legally binding terms and conditions can be found in your specific
mortgage product terms and conditions. For further information please speak to an advisor in a branch or by telephone.
Coventry Building Society telephone advisors are available Monday to Friday 8am-8pm, Saturday 9am-5pm, Sunday 10am-4pm. Contact your service provider for details
of call charges, as costs may vary. We may monitor, record, store and use any telephone, email or other communication with you for training, crime prevention purposes
and to check and improve the quality of our customer service. Information correct at time of going to print (November 2013) and may be updated and amended at any
time.
Coventry Building Society. Registered Office: Economic House, PO Box 9, High Street, Coventry CV1 5QN.