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  Mortgage Payment Options

Your home may be repossessed if you do not keep up repayments on your mortgage.
 

St. James's Place Bank no longer offers mortgages to new clients.

Receiving your offset benefits

If you choose to reduce the amount of interest you pay on your mortgage St. James's Place Bank gives you a choice of how you would like to take the benefits of offsetting. You can choose from Shorter Term, Lower Payments or Reduced Debt, and it is easy to change these at any time online.

Shorter Term
Lower Payments
Reduced Debt

Shorter Term

When you offset you reduce the amount of interest paid over the term of your mortgage, which in turn reduces the balance of your mortgage faster and could result in your mortgage being paid off early.

Here is how it works:

  • As the money in your savings and current account offsets against your mortgage, you earn no interest on that money, but pay less interest on your mortgage;
  • Your monthly payments do not change as a result of offsetting so you are effectively overpaying each month;
  • The mortgage balance reduces faster which means that you could pay off your mortgage early.

Shorter Term on an interest-only mortgage

If your clients choose an interest-only mortgage, it is important to note that the level of savings they offset may have to be higher than if they had chosen a repayment mortgage, if they want to pay their mortgage off early. The most likely benefit of Shorter Term for interest-only mortgages is a reduced final mortgage balance. This means that the repayment plan your clients have in place to pay off their mortgage may not have to reach the level they had originally expected.

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Lower Payments

When you offset you reduce the amount of interest paid over the term of your mortgage. The offset benefit is received in the form of lower monthly mortgage payments.

Here is how it works:

  • As the money in your savings and current account offsets against your mortgage, you earn no interest on that money, but pay less interest on your mortgage;
  • Depending on the amount being offset, your mortgage payments adjust automatically each month, resulting in a lower monthly payment;
  • Because you benefit from lower monthly payments, your mortgage balance and term will not reduce as a result of offsetting.

Keeping track of your monthly payments

If you select Lower Payments, your monthly mortgage payment will change frequently to reflect your offset benefit. To keep track of your monthly mortgage payments you can register for online banking and then log in to your St. James's Place Bank Facility, where you will find the details of your next monthly payment.

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Reduced Debt

This payment option enables you to reduce the amount of interest paid during the term of your mortgage and reduce your mortgage balance over your chosen term.

Here is how it works:

  • As the money in your savings and current account offsets against your mortgage, you earn no interest on that money but pay less interest on your mortgage;
  • Your monthly payments do not change as a result of offsetting, so effectively you are overpaying each month until a recalculation* is required;
  • Each time a recalculation* occurs, your regular mortgage payments are adjusted based on your reduced balance and spread out over the remaining mortgage term.

* Examples of a recalculation include interest rate changes, changing from interest-only to repayment mortgage, taking a payment holiday, etc.

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