Woolwich Offset Tracker Mortgage Friday, 22nd May 2009

Offsetting like this reduces the amount
of interest you need to pay the lender each
month. So you can either simply pay less
each month, or keep payments the same
and pay off your mortgage earlier.
You won’t receive interest on your savings
as a result, but you’ll still have access to
them when you need them. So really, it
gives you the opportunity to manage your
money as it suits you.
As you’ll see on page 6, to save more
interest you can also make overpayments
on your mortgage if it suits you.
We calculate your interest daily, so
anything you put in your savings or current
account starts working immediately to
reduce interest on your mortgage.
Term reduction
We will collect the monthly mortgage
payment as normal. We will deduct any
offset benefit from the capital balance,
thus reducing the mortgage term.
Although the default option is to reduce
the term, you can switch between term
and payment reduction at any time with
no fee – just contact London Mortgage Advice
to find out how.
Payment reduction
Your monthly mortgage interest payment
is reduced to reflect the credit balances in
the offset arrangement. Depending on
how much you’re able to offset over the
course of the mortgage you could save
thousands of pounds in interest payments
– contact your Financial Adviser to find
out how.
If you have a mortgage of £120,000, but have £10,000 in savings and current accounts,
by offsetting, you will only pay the mortgage interest on the £110,000 difference. You can
then choose to either pay less each month as you are only charged interest on £110,000
or you can choose to overpay, without incurring early repayment charges, each month to reduce the term of the mortgage.

Is an Offset Mortgage
right for you?
It could be particularly useful if you:
have excess funds left in your current a • ccount to put in your savings
• already have savings - as you can have these effectively working for you
at the full mortgage rate by offsetting them
• are looking to reduce your mortgage – you can do this by either regularly
saving and offsetting or make as many capital overpayments as you like
• require flexibility to access your Barclays savings and current accounts
whenever you want - you can dip in and dip out as you need, and even
transfer money online between accounts
• are a higher rate tax payer - you will not pay any tax on interest you would
have earned on your savings or current accounts
• have unpredictable cash flow - if you are self-employed, receive occasional
large bonuses or commission, or work on highly-paid short-term contracts,
any large sums you receive will start working hard for you immediately,
as your interest is calculated daily. This could also be the case with other
sources of income such as rent
• save regularly towards your annual tax bill - as you can have this money
working efficiently all year to reduce your mortgage payments.
If you have savings or a little left over each month, an
Offset Mortgage could suit you. That applies whether
you’re remortgaging or buying a new home.
Unlimited overpayments available
Unlike many Offset Mortgages, ours
lets you overpay as much as you like,
whenever you are able.*
We calculate interest daily -
so your money works harder
Anything you put in your savings
or current account starts working
immediately to reduce the interest
payable on your mortgage.
* Fees may apply on full redemption
You can choose from many
eligible accounts, and view
and manage them online
You choose up to 12 of your eligible
Barclays current and savings accounts -
see page 9 for a list of eligible accounts.
You can then see all your accounts online,
alongside your mortgage account, and
make transfers when it suits you.
You keep any historical
ISA allowances
If you’ve saved money in an ISA in the
past you can offset this. But if in the
future you don’t need to offset your ISA
accounts, you will have retained your
historical tax-fee savings capability.
Your savings offset at the whole
mortgage rate
By offsetting with Woolwich, you are
effectively getting interest on your savings
at the full mortgage rate. For example,
if your mortgage rate is at 6%, your
savings and current account will offset the
mortgage interest at that rate.
You can also reduce your tax bill.
Even though your current and savings
accounts do not earn interest, they do
reduce what you pay on your mortgage
- and you won’t pay tax on your savings
because it’s not earning any interest.
This is particularly efficient if you’re a
higher rate tax payer because you won’t
pay tax on savings interest earned.
7How can an Offset Mortgage
reduce the length of my mortgage?
If you choose term reduction, we’ll collect
your full monthly mortgage payment, and
the benefit from offsetting your savings
will be used to reduce the capital part
of your mortgage, thus helping to pay
it off sooner.
If I have chosen to reduce
my monthly payments, how
will I know what I’m paying
each month?
We’ll send you a monthly statement
showing a daily breakdown of the benefit
you receive from your linked accounts,
and the monthly direct debit payment
we will collect.
How and when do I choose
which accounts to offset?
To ensure you make the most of your
savings and current account balances,
pick the accounts you want to offset as
soon as you set up your Offset Mortgage.
If you open new accounts after that time,
you can add them when you do - up to the
maximum of 12 eligible accounts.
What do I get when I open my
offset account?
As part of your Offset Mortgage, we will
open a Mortgage Current Account and a
savings account for you. They will both
be linked to your mortgage and you can
keep your funds in one of the accounts or
separate into the two accounts. The credit
balance is offset against the mortgage
which reduces the amount of interest
charged on the mortgage.
How many people can be part of
an Offset Mortgage?
The maximum number of applicants is two.
Can we offset joint savings
accounts?
You can offset a joint account against
a joint mortgage for the same names,
but you can’t use a joint savings account
to offset an individual’s mortgage.
Your questions answered
8Can I offset an individual named
account on a joint mortgage?
Yes, you can use the savings or current
account of an individual named on the
mortgage to offset a joint mortgage they
have. Please note that account information
for their individual account will appear on
the joint monthly mortgage statement.
When will my reduced payments
show on my account?
This will not show on your first mortgage
payment - this debit interest is always
collected in full in the first month.
Offsetting credit balances will begin
to show in arrears, from the following
month onwards.
What interest rate will I pay?
All Woolwich Offset Mortgages are tracker
mortgages and so the interest rate moves
up and down in line with Barclays Bank
Base Rate.
Which accounts can I use
to offset?
Please use the following table to see which
types of accounts you can use. If you hold
any other account, please ask and we can
advise you of the best way to move funds,
or open a new account. If you do not have
a Barclays account, we can set up a
suitable one for you.
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Eligible Current
Account Types
Barclays Bank Account
Additions
Platinum
Flexible Current Account
Staff Current Account
Premier Life
Current Accounts Plus
Additions Active
Eligible Savings
Account Types
Openplan Savings Reserve
Openplan Savings Pot 1
Openplan Savings Pot 2-12
Barclays Mini cash ISA
Barclays Flexible Savings
Pot 1
Barclays Flexible Savings
Pots 2-12
Barclays Cash ISA
Tax Haven ISA
Tax Beater Cash ISA
What happens if I have more in
savings balances than I have
outstanding on my mortgage?
Because of the way the Offset Mortgage
is structured, you wouldn’t receive any
credit interest. If this becomes the case,
you would be better off transferring the
surplus into a savings account not linked
to the Offset Mortgage.
If I have exactly the same
in savings as I have on my
mortgage, will I pay or receive
any interest?
This is called 100% offset, and
theoretically it will mean you pay no
interest on your mortgage and receive
no interest on your savings. In reality
there will be slight anomalies as credit
interest uses the actual number of days in
the calendar month, while debit interest
simply divides the year into 12 (so each
‘month’ is 30.4 days).
For example, in a 28 day February, the
credit interest applied in March will be
for 28 days whilst the debit charged will
be for a twelfth of the year i.e. 30.4 days,
there will therefore be a difference.
Will I get credit interest on
my savings?
No, your savings will instead be use to
reduce your mortgage interest. But it also
means you won’t pay tax on any savings
interest you may otherwise have earned.
Can I withdraw an account from
the offset arrangement?
Yes. Simply let us know which account you
no longer wish to offset and we can arrange
this for you. Please see the question below
for the effect of this withdrawal.
What happens if I withdraw an
account from the offset
arrangement?
Any account you chose to withdraw from
the offset arrangement will continue to
operate under the terms and conditions
of that particular product. You will earn
interest (if applicable) on any credit
balances held in that account in
accordance with the terms and conditions
for that particular account. Any credit
balances held in the withdrawn account
will not form part of the offset calculation.
You can opt to return any eligible account
to the offset arrangement at any time.
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