offset mortgages

[ozzieclare2be]

does anyone have one of these , any opions compared to normal ones? thanks x

[Guest Nick11]

Can't really help you , but we used Jim scott - he posts on here - great guy and good mortgage broker. Not pushy and good at his job

[ozzieclare2be]

Can't really help you , but we used Jim scott - he posts on here - great guy and good mortgage broker. Not pushy and good at his job

 

thanks hun we have a broker and this is looking like the best option for us, just wondered if anyone else had any "real" experience in terms of its effects etc we are hoping it will knock years off the mortgage (either that or a lottery win )

[Guest Jim Scott]

Many thanks for that Nick.

 

ozzieclare, your mortgage broker should be able to explain this to you very clearly? That's what we are there for. You are welcome to call/contact me for free advice, i.e even if you just want a second opinion.

 

A loan with an offset account includes a separate bank account that you use for savings and other day to day transactions. The cash balance in your bank account reduces the amount of interest charged on your loan. For example, if you have a loan of $100,000 and you have $20,000 saved in your offset account, you are charged interest each day on $80,000 (that is, your loan balance less the amount in the account). Note that the interest savings will not reduce your ongoing monthly repayment obligation, instead it will reduce the term of your loan.

 

 

To answer your question, yes, an offset account can knock years off your mortgage. The amount of interest you could save depends on the size of the loan and the usual balance in your offset account.

 

A line of credit works similarly, but your loan and the bank account are "all in one" for that product.

 

You can also knock years off a mortgage with a regular loan simply by increasing your weekly/fortnightly/monthly repayment or paying in lump sums when you can.

[ozzieclare2be]

Many thanks for that Nick.

 

ozzieclare, your mortgage broker should be able to explain this to you very clearly? That's what we are there for. You are welcome to call/contact me for free advice, i.e even if you just want a second opinion.

 

A loan with an offset account includes a separate bank account that you use for savings and other day to day transactions. The cash balance in your bank account reduces the amount of interest charged on your loan. For example, if you have a loan of $100,000 and you have $20,000 saved in your offset account, you are charged interest each day on $80,000 (that is, your loan balance less the amount in the account). Note that the interest savings will not reduce your ongoing monthly repayment obligation, instead it will reduce the term of your loan.

 

 

To answer your question, yes, an offset account can knock years off your mortgage. The amount of interest you could save depends on the size of the loan and the usual balance in your offset account.

 

A line of credit works similarly, but your loan and the bank account are "all in one" for that product.

 

You can also knock years off a mortgage with a regular loan simply by increasing your weekly/fortnightly/monthly repayment or paying in lump sums when you can.

 

 

sorry hun i know what one is and how it works broker explained it to us lol, what i meant was has anyone got one and is it working as it should be doing, not making myself very clear here lol. We looked at line of credit too but maybe when we buy another property in a few years as i beleive these are good for investing. Hope this makes sense x