Offset Mortgage Account Protection

ste045

I have a considerable amount of cash in my Nat West offset account, in excess of 100k.

If the bank were to go belly up , would all of the money be protected, only the first 85K or none of it.?

Thanks in advance for info.

harvey115

I think the rule is that any amount above 85K will be used as a lump sum payment to your mortgage account and you will be given your £85K back.

So if you have:

Mortgage: £200,000
Offset balance: £150,000

If anything happens to the bank:

Mortgage: £135,000
You get: £85,000

So the £65,00 above the agreed FSCS £85,000 will be paid into your mortgage balance to reduce the overall borrowed amount.

Hope this helps.

ste045

thanks Harvey

dimbo61

Would it not be wise to pay some of the mortgage off to bring the offset balance down to below £85K ?

bubieyehyeh

What advantage does that give you. Keeping it offset its available for you use for emergencies.

vacheron

What is advisable is that if you have a joint mortgage and have over 85K offset to move the surplus over to an account in the other persons name or put the money into an account in joint names. This way you can protect up to 170K as the compensation is paid per person.