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    • Tiger1971#
    • By Tiger1971# 9th Aug 18, 5:28 PM
    • 2Posts
    • 0Thanks
    Coventry BS paying SVR on offset balance
    • #1
    • 9th Aug 18, 5:28 PM
    Coventry BS paying SVR on offset balance 9th Aug 18 at 5:28 PM
    I have a question about Coventry BS (CBS) mortgages I'm hoping someone can help me with.
    I'm interested in their 5 (at 2.15%) and 10 (at 2.59%) year fixed offset products. While discussing this with one of their mortgage advisers I was told that opting for the 5 year deal and then going onto their SVR with an offset at the end of the 5 year term (let's assume its 4.74% for CBS if they add the recent 0.25% base rate rise) would benefit me to the tune of approximately 116 / month if I had 100K in the offset and we assumed the balance owing was 160K. This is based on being told that CBS would be paying me the SVR of 4.74% on the 100K offset money while charging me 4.74% on the net 60K mortgage balance - all of this being in comparison to being on the 10 year fixed offset at 2.59%. Is anyone aware of this principle of paying interest on the offset figure once on the SVR? Is it real?!
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    • silvercar
    • By silvercar 9th Aug 18, 5:50 PM
    • 38,627 Posts
    • 161,634 Thanks
    • #2
    • 9th Aug 18, 5:50 PM
    • #2
    • 9th Aug 18, 5:50 PM
    The way an offset works is that you don't pay any interest on the amount that is in your offset savings account. So if you had 100k offset, you would only pay interest on the 60k. But this applies whatever the interest rate is. So if you went for the 10 year rate, you would only be paying interest on the 60k at 2.59%.
    • Tiger1971#
    • By Tiger1971# 14th Aug 18, 2:24 PM
    • 2 Posts
    • 0 Thanks
    • #3
    • 14th Aug 18, 2:24 PM
    • #3
    • 14th Aug 18, 2:24 PM
    Thanks Silvercar - that was my understanding too. I got the bizarre explanation from the Coventry BS mortgage Adviser not once but twice. His name was Richard and he claimed to have previously worked for Barclays. He said that Coventry BS did things differently. Ha! I've now spoken to another mortgage adviser at the Coventry BS and been given the version that you describe - which is what I expected. This messing about caused a couple of days delay in choosing the product we wanted. I hope we can get our application in in time before they raise their rates!
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