Never really looked in to this feature
But a fixed rate home loan I was looking at doesn’t have an offset account
Could you fix 99% of the loan and have 1% variable to take advantage of an offset, or does it not work like that ?
Home loan splitting
letmethefuqin on 19/02/2022 - 12:29
Comments
Could you fix 99% of the loan and have 1% variable to take advantage of an offset
Yes you can. I have mine split for this exact reason.
1% variable might be a bit small though to take full advantage of the offset. As @miruku mentioned, if the funds in your offset exceed your variable loan amount, the excess funds won't do anything. If you're planning to actually save more money to put in your offset over time, you might find yourself exceeding that 1% very quickly.
Also if your offset is that small, you might not even be saving money as offset accounts often have annual fees. Take ING for an example - they charge $299 for the "Orange Advantage" product which has an offset account and currently are at 2.44%pa.
$500,000 loan = $5,000 variable portion = max interest savings of $5,000 x 2.44%pa = $122. You are losing $177pa even if you maintain the maximum $5,000 offset for the entire year.
You could do anything, so long as the bank allows it.
classic andy
I split my home loan with UBank into 90% fixed and 10% variable a year ago at 1.75%. Glad I did. I accidently stumbled into the nadir of fixed interest rates. Another 2 years to go at way below inflation rates. Woohoo!
I made my $600k loan in to $400k fixed and $200k variable.. The plan is to put the salary in that account and use a credit card for daily needs and pay it off before the deadline date.. This way after 6 Months to an Year I would be saving a good amount.
Unfortunately not. You can only offset variable part.
Also, recommend calling a bank/talking to a broker re discount rates before you switch.
Sorry don't believe this can happen.
Closest thing is Westpac that allows up to $30k paid into fixed part for redraw.
ANZ you can offset against fixed loan <12 months. No other lender has this flexibility with fixed loans.
A few others have $30k p.a. max offset; $10k p.a. max extra repayment; max extra repayments of 12 months worth of loan repayments etc. Not a proper offset feature though
What? There are plenty of banks that offer fixed loans which have offsets against them. Bendigo Bank, Bank Australia, Bank West, Movebank, AMP and I'm sure many others. They all offer the ability to retract the offset account whenever you want through the term of the fixed loan. ANZ is the least innovative bank in Australia so the idea of they being a leader in anything is amusing.
I stand corrected!
In my experience, you can only offset up to the amount in the variable portion of your loan. Eg if you’ve split $10k into variable, any $ over $10k in your offset account won’t be doing anything for you. Might want to check that that’s also the case with whatever bank you’re going with.