Unexpected expenses always seem to pop-up when they are least convenient.

Access to spare cash means these relatively minor life-events shouldn’t trigger any financial pain.

Sounds good in theory, however an extensive survey recently conducted by popular home loan comparison site finder.com.au found that 50% of Australian households are at risk of ‘bill shock’ if anything unexpected happens.

The results are startling:

  • 30% of Australians have less than $1000 saved.
  • 20% of Australians have less than $500 available at short notice.
  • 12% of Australians have less than $100 on-hand.

According to the survey, only 41% of Australian households have at least $5000 spare cash available at short notice.

A similar survey recently conducted by creditcardfinder.com.au revealed more than 60% of families are relying on credit cards to pay their household bills.

Of course the underlying message we are taught from a young age is to save for a rainy day. 

You’re probably wondering how all this is connected to home loans.

Did you know that a flexible, tailored home loan is one of the best ways to cut-back your costs and save?

Saving that gives back

Saving money may not come naturally to some people, but developing a household budget and reviewing your financial position regularly is a must. 

In fact after allowing for essential spending, people are quite-often surprised to learn which unnecessary spending to cut-back on and what needs a better deal negotiated, leaving a sensible amount that can be saved.

Where your savings are kept can continue to reduce your expenses for example, by reducing the interest and term on your home loan - thereby increasing your savings further.

The answer could be a 100% interest- offset account.

With home loan interest rates much higher than saving accounts, it makes perfect sense to switch to a home loan interest-offset account to reach your savings goal sooner.

Offset accounts explained

Commonly referred to as a mortgage offset account or home loan offset account, a 100% interest- offset home loan 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- 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.

We can help you save

A 100% offset account will help you save thousands of dollars and then some, by allowing you to reduce your balance sooner and strip years from your home loan term.

As a flexible non-bank lender, 100% interest-offset accounts are standard on most of our fixed and variable tailored home loans.

Beware: not all offset accounts are 100% and many offset accounts aren't 100% on a fixed interest home loan. 

Ours are - with unlimited repayments - 100% of the time.  So every dollar in your offset account is reducing your monthly interest - every day - for 100% of the balance. 

Use your offset account the same way you'd use an everyday account, but avoid dipping into your savings amount unless absolutely necessary.

Get motivated

Saving is important because we can’t predict the future.  However stagnant wage growth, rising living expenses and a decline in housing affordability is keeping many people from building a nest-egg for the future.

A 100% offset home loan account is the perfect reason to get motivated and leverage your savings goals to grow your nest-egg quicker.

Let’s talk home loans

When it comes to home loans, there’s no such thing as one size fits all.

It pays to talk to someone that wants to hear your story and run through some different borrowing solutions with you.

Why not incorporate a discussion about 100% offset accounts as part of our free, no obligation home loan review with one of our experienced and accredited professionals by organising an appointment today.

That’s right.  In a refreshing twist you’ll actually talk to a real person.

It’s just one of the many features and benefits included in a tailored home loan solution from Loan Avenue – affordable home loan solutions for everyday Australians like you.

Let us show you.  To take advantage and make an appointment call 1300 56 26 28 or leave a message here.