A customer who 'actively offsets' generally holds an offset mortgage and a current account and/or savings product, makes regular use of the flexible features of these accounts (such as Current Account Transfer Service, paying in a monthly salary), makes regular account transactions, and has a current account and/or savings balance of at least 2% of their mortgage balance.
AER: Annual equivalent rate
AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. As every advertisement for a savings product, which quotes an interest rate, will contain an AER you will be able to compare more easily what return you can expect from your savings over time.
APRC: Annual percentage rate of Charge
Your Mortgage Illustration will show you the APRC for your mortgage. This is a notional annual interest rate which takes account of fees and charges to reflect the total cost of your mortgage. Your Mortgage Illustration will detail the fees which are included in this calculation. An APRC is calculated using a standard method so it provides an effective way for you to compare quotes from different lenders.
The average balance of your current account and savings is used in our calculators to show the benefits of offsetting. In reality, these balances will vary from day to day. Because we calculate interest on the basis of daily balances, we make the most of your money.
B.o.E stands for Bank of England. The Bank of England sets interest rates. Find out more at www.bankofengland.co.uk.
The process of paying back the money you owe on your mortgage. Offsetting saves you interest, so you could do this faster.
You can choose a combination mortgage. This can consist of interest-only parts, repayment parts, or a combination of both of these methods of mortgage repayment.
Please note that for any part of a mortgage which is interest-only, the capital must be repaid by you at the end of its term. Therefore for any such interest-only element, you must make arrangements to set up a savings or investment scheme which will provide sufficient funds to repay the capital.
During a house purchase, the day on which the buyer's conveyancer pays the balance of the purchase price to the seller's conveyancer, to allow transfer of ownership. In Scotland this is called the entry date.
This is an account that is connected to any other account so that you can easily transfer money both in and out.
Customer identification number
A unique 10-digit number, given to you when you first apply. You'll need to quote this when you contact us about your application.
"Disabled" means being unable to work at your normal occupation because of an accident or sickness.
Effective Interest Rate
Effective interest rate is calculated by taking the mortgage balance, deducting the amount held in your Current Account and/or Savings, multiplying the resulting figure by the interest rate applicable to the mortgage and expressing this as a % of the original mortgage balance.
Gross rate means we will not deduct income tax from the interest we pay on money in your account. It’s your responsibility to pay any tax you may owe to HM Revenue and Customs (HMRC).
Your 'income multiple' is used as a guide to how much a lender will be prepared to advance you on a mortgage based on your annual salary.
A type of mortgage where your regular mortgage payment only covers the interest on the loan.
A savings account with government-imposed limits on the amount you can save each year, which pays interest without deducting personal tax.
All the products in an offset plan are called jars. You can choose to name your jars to help you to keep track of your finances.
'Key facts about our insurance services' document
A document that provides you with details of the level of service we offer.
'Key facts about this mortgage' document
A document that details our mortgage product, the overall cost, regular mortgage payments, fees payable and other features of the mortgage. This is also known as a 'key facts illustration'.
Level term assurance
A life insurance policy that pays out a set amount on the death of the person insured by the plan during the term.
Loan To Value
Loan to value refers to the amount of money borrowed (the loan), expressed as a percentage of the value of the property to be purchased or remortgaged (the value). The value of the property is defined as either the purchase price or the valuation, whichever is the lower.
With some products you can skip up to two monthly payments a year by taking a payment holiday. The amount is simply added to what you owe, and your remaining payments increase slightly to cover it.
A unique 10-digit number that you'll be asked for when you call us to make a transaction over the phone.
Plan security code
A four digit code given to you when your plan is open. You'll need it to register for online banking, and when you call us to make a transaction. You must not write this number down or tell it to anyone.
A type of mortgage where your regular mortgage payment is split between paying interest and repaying the money you borrowed.
An amount held back from the initial loan by a lender until certain repairs or improvements have been completed or, in some cases, to cover the cost of road building on a new housing estate.
Tracker Rate Mortgage
A rate which guarantees to stay at a fixed level above the Bank of England rate, you benefit from any reductions.
Tax on savings
With offsetting you're saving interest - not earning it, so there's no tax to pay.
Tax free is the contractual rate of interest payable where interest is exempt from income tax.
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