Did you know that a 100% home loan interest-offset account can save you tens of thousands of dollars over the life of your mortgage?
The possibilities are real – perhaps a new car, an overseas holiday or extension.
It’s just one of the many features and benefits included in a tailored home loan from Loan Avenue – affordable home loan solutions for everyday Australians like you.
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Offset accounts explained
Commonly referred to as a mortgage offset account or home loan offset account, a 100% home loan interest-offset account is the simplest way to significantly reduce the interest rate expense on your home loan.
Saving money is about managing the cost of time. The best way to do this is by linking a 100% interest rate offset account to your home loan and using it as your everyday banking account, instead of using a standard savings account.
Offset accounts are a feature linked to a variable or fixed rate home loan. They are used the same as an everyday banking account such as receiving your salary, paying bills and personal spending.
However unlike a savings account, an offset account saves interest rather than earning interest. So when home loan interest rates are higher than rates for everyday saving accounts, an offset account increases your available cash over the term of the loan by reducing your interest cost.
Reduce the cost of your home loan
When you borrow to buy a home, the bank will charge you interest on the total amount of the loan balance owing. Interest is calculated daily and charged monthly.
A 100% home loan interest-offset account uses the balance of your offset account to reduce the total home loan balance. This means you are only charged interest on your home loan balance minus the balance of your offset account.
The more money you keep in your offset account and the longer you keep it there, the less interest you pay on your home loan. Because home loan interest is calculated against your loan balance daily, every dollar you have in your offset account saves you interest each day it’s there.
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Reducing your home loan repayments is that simple
You don’t need to have a lot of money in your offset account to save interest cost. Even a small amount of money in your offset account can save you thousands of dollars over the life of your home loan.
Home loan interest-offset example
Loan amount: $450 000
Loan term: 30 years
Interest rate: 6.80%
Offset account balance: $20 000
Interest cost you could save: $78 323
Does financial freedom feel like something only others qualify for? Don't feel chained to your home loan for the rest of your life. We have a range of innovative home loan solutions that are well-designed, easy to understand and great value.
Let us show you. To make an appointment call 1300 56 26 28 or leave a message here.
