Mortgage Offset Accounts
Whatever type of mortgage you are looking for you will want to get the best mortgage as it will save you money. However, it can be very hard to find the best mortgage. Where ever you look different people will give you different information about what mortgage will be the best one for you. Offset mortgages are no different. There are many providers and they will all claim that they have the best product. One of the best ways to find the best offset mortgage is by knowing what to look for in the mortgage.
What is an Offset Mortgage?
An offset mortgage is a type of mortgage that is offered by most providers. With the offset mortgages you will be able to use the offset accounts to deposit your savings. The amount of money in these offset accounts will then be offset against the loan amount when interest is calculated. This means that you will reduce the amount of interest that you pay.
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How Do I Use Comparison Sites?
Comparison sites are one of the most common ways people will compare mortgages to find the best one. However comparison sites won’t always tell you which mortgages is the best:
- What are they? Comparison sites are sites that will compare some of the mortgages that are available. If you are looking for an offset mortgage you will be able to get a list of the “best” offset mortgages from these sites.
- Why are they hard to use. While the comparison sites are handy, each of them will yield different results. This is because many of the offset mortgages will change the terms on a regular basis. Furthermore, the comparison sites won’t cover all the mortgages offered on the market.
- Depends on your personal circumstances. To find the best offset mortgage you will have to know what your personal circumstances are. By knowing where you stand you will be able to find the right mortgage:
- Do you have savings? The interest that is charged to offset mortgages will be reduced if you have funds in the offset account. If you do not have savings then you will not be saving money. Calculate how much interest you will pay with your current savings to see how good a deal you are getting.
- Is the interest rate low? If you are borrowing a large proportion of the property value then the best offset mortgage may be the one that does not charge a higher interest rate for doing this.
- Do you need additional features? Be sure to note what features your offset mortgage will come with. Many people will want to use an offset account to pay off their loan faster so be sure that you are able to make additional repayments for no extra charge. Furthermore, you may also want to take a repayment holiday if you are ahead. If you would like to do this then be sure that your loan offers this feature.
- Fees. If you are remortgaging then you may find that the best offset loan is not the one with the lowest interest rate, but is one that offers free valuations and legal fees for those who are remortgaging.
HomeStar No Fee 100% Offset
This fantastic loan offers no fees and no mortgage insurance to pay. Enjoy one of the lowest rates on the market and the ability to offset your loan.
- Interest Rate of 6.26%
- Comparison Rate of 6.26%
- Application Fee of $0.00
- Maximum LVR With LMI: 90%
- Minimum Borrowing: $250,000
- Maximum Borrowing: $1,000,000
When you are looking for an offset mortgage you should be sure that you are getting the best mortgage. However, the best mortgage will depend only on what your personal circumstances are. If you have a lot of savings then an offset mortgage with flexible features may be the best for you. If you are remortgaging then an offset mortgage with no application fees can save you thousands. Be sure that you understand what will save you money when you apply for the offset mortgage.
Featured Offset Accounts
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
HomeStar No Fee 100% Offset |
Zero fees and an interest only repayment alternative for up to 10 years. | 6.26% | 6.26% | $0 / $0 | 90% | $250,000 / $750,000 |
 
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HomeStar 90% LVR No Fee Offset Loan |
A range of features including Visa debit card perfect for investment property loans. | 6.96% | 6.96% | $0 / $0 | 90% | $250,000 / $750,000 |
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 MyRate Advantage Rate Loan |
Consolidate your finances with an offset account and enjoy one of the lowest interest rates available. | 6.15% | 6.15% | $0 / $0 | 95% | $100,000 / $2,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan |
A leading basic loan with an offset account to make banking easier. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
|
 Westpac Rocket Repay Home Loan |
Rocket Repay Home Loan | 7.09% | 7.22% | $600 / $8 | 92% | $25,000 / $10,000,000 |
|
 NAB Portfolio Facility (LOC) – $250,000 – $499,999 |
Portfolio Facility ($250,000 /$499,999) | 6.56% | $0 / $550 | 90% | $250,000 / $499,999 |
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How Do I Compare Mortgage Offset Accounts?
With all loan types there are a variety of lenders that will offer the same product with slight variations. These variations in the loan may be small but they can potentially save you thousands of dollars over the life of the loan. Therefore, it is very important that you find the best loan for you. While there are many ways in which you will be able to find the best loan many people will compare the mortgages to find the best. Offset mortgages are a type of loan and like all loans there are many to choose from.
What Types of Offset are Available?
While the offset mortgages are a type of loan there are actually two types of offset mortgages available. Before you compare specific loan you should be sure you know what type of offset loan you would like:
- Current account mortgages. The first type of offset mortgage is the current account mortgage. With this type of offset mortgage the funds you borrow will be drawn from an account and you will keep all you finances together to lower the amount you owe.
- Linked accounts. The other form of offset mortgages is the linked accounts. With the linked accounts you will have a normal loan and the offset accounts will be linked to the loan account. The offset account will usually be a standard transaction account.
What Do I Compare when Looking for an Offset Mortgage?
When you comparing offset mortgages and are looking for the best offset mortgage you should know what to look for. To find the best offset mortgage you should compare:
- The loan to value ratio. When you are looking for loan you will need to know how much of a deposit you will be able to provide. Many offset mortgages will offer one lending rate for people that are willing to pay 20% of the loan to value ratio, and another to people that cannot do so. Look out for these higher lending charges.
- Interest rate. The interest rate is the main feature of loans that will determine how much money you will save. Many lenders will charge you a higher interest rate simply for having an offset account while others will not. Be sure to get a loan from the lender that does not raise the interest rate because if you don’t you will essentially be getting the same interest rate other people are getting without offsetting.
- Flexibility with the repayments. While most offset mortgages are very flexible you should be sure that your loan will let you do what you want. Make sure there are no fees for paying the loan off early or fees that will be charged for using specific features.
What is the importance of choosing the right offset mortgage?
When you are choosing an offset mortgage comparing the available offset mortgages will give you an idea of what other providers are offering. Furthermore, by comparing offset mortgages you will ensure that you are getting a good loan that will not become a financial burden.
Offset mortgages are a great way to save money on your home loan if you have savings that can be set aside. However, there are many offset mortgages available and as a result it can be hard to find the best and the cheapest offset mortgage. Comparing offset mortgages will allow you to see what the other providers are offering and what is normal. This will help you identify the best deals and will hopefully lead you to a loan that is cheap and is not a burden.
What Are Offset Mortgage Rates?
There are many different mortgage types available and each of the mortgage types will suit different people. While some people may get a loan and save money, other people may get the same loan and end up losing money, it all depends on your personal circumstance. This is especially true with offset mortgage loans. The offset mortgage rates may look worse when you compare them to their loan but if you are able to effectively manage them you may end up saving a lot of money.
What is an Offset Mortgage Rate?
An offset mortgage is a specific type of loan that is offered by most providers. The offset mortgages are:
- Offset mortgages. The offset mortgages are loans that are designed to help people with savings save money. When you have an offset mortgage you will be able to deposit your savings into the offset account. The funds in this account will then be offset against the loan value when interest is calculated.
- How can they help you save. The offset mortgages will save you money by reducing the amount of interest that you pay.
Interest Rates Offered with Offset Mortgages
All offset mortgages will offer you an interest rate. While the interest rate may seem undesirable you must keep the following in mind:
- May seem high. As mentioned the interest rate that is offered with an offset mortgage may seem higher than others. However, if you have the savings available you will be able to bring the interest that you will be charged to a rate that is lower than many of the other loans that are available. By reducing the interest rate you can potentially save thousands over the course of the loan.
- Interest charged daily. With most offset mortgages the interest will be calculated daily. Many people will use the offset accounts wisely to further reduce the interest that they are charged. They do this by using the offset account as a transaction account while using their credit card for purchases. This leaves more money in the offset account for longer, reducing the amount of interest that will be paid.
How Do I Use the Mortgage Offset Rate to My Advantage?
To save money when using an offset mortgages you must be able to do a few things. To effectively use an offset mortgage you must:
- Have savings. The offset mortgages will only work for people if they have savings in the offset account. By having savings in the offset account you will be reducing the amount of interest that will be charged to the loan. This will reduce the amount of money you will have to pay.
- Manage the offset account. To further save money you should manage the offset account effectively throughout the life of the loan. This may mean replenishing your savings when needed or keeping your wages in the account as long as possible. By doing this you will save money.
- Most will save money. If you are able to effectively manage your offset account and have savings in the account you should save money. In fact, most people that use the account effectively will either pay off the loan faster or reduce the amount of money they put on the loan.
Offset mortgages rates can be very deceiving. While most people may be turned off by the inflated interest rate, the smart borrower will realise that you are able to reduce the amount of interest that you pay onto the loan if you use the offset account properly. If you use the offset account properly you should save money or pay off the loan faster.
How Do I Choose a Mortgage Offset Deal?
When you are applying for any type of mortgage you should be sure that you look at what is available yourself. Many providers are not trained or are even not allowed to compare their products with other products. One of the few ways that you will be able to find the best mortgage will be to look for yourself. With offset mortgage deals this is especially true as most providers will offer these types of mortgages. So should you trust your bank or should you look further to see who offers the best offset mortgage deals.
Who offers the best mortgage offset deals?
The best offset mortgage deals will be the deals that will cost you the least amount of money. However, who is able to offer you the best offset mortgage deals. Is it your provider, your bank or someone else?
What will the Bank or Building Society Offer?
When you are talking to a provider about their offset mortgage deal what will they be offering exactly? They will offer:
- Their product. When you approach a lender about a specific product they will offer you that product an only that product. They will only offer you the offset mortgage that they offer and will not be able to mention any other providers or their loan.
- Cannot compare loans. Because the bank or building society will not be able to mention any other loans that are available they will not be able to compare loans. Comparing loans is by far the most effective way to see what you are getting with a loan.
Who Should you Talk to?
As mentioned before, lenders are not able to compare loans from other lenders. When you are considering applying for a loan you should consider talking to:
- An offset mortgage broker. By talking to a mortgage broker they will be able to advise you on what loans will save you money. They will have experience in the market and will know exactly what type of offset loan will be able to help you save money.
- What deals are available. The mortgage broker will be able to determine what deals will be available with some mortgages and how they will help you save. For example, if one offset mortgage deal allows you to make additional repayments and another doesn’t the mortgage broker will often recommend the deal that allows you to make the additional repayments.
- What loan will suit you. All in all, the mortgage broker will be able to advise you on what mortgage will best suit you and how you plan to pay off the loan. The mortgage brokers will look at all the loans available and will give you a better idea about what is available on the market.
Who offers the best deals?
To bring us back to the original question about who offers the best deals, the answer will be we don’t know. You lender may very well offer the best deal but they will not be able to advice you about what the best deals are. By going through a mortgage broker you will be able to get great advice and will hopefully end up with one of the cheapest offset mortgage deals available.
There are many offset mortgage deals that are available on the market. However, to find the best offset mortgage deal you should not visit the lender. The lenders will not be able to compare loans and find you the best deal. They will only be able to offer you their products.
Related posts:
- Interest Only Offset Accounts Explained
- Redraw Vs Offset Accounts Explained
- Offset Accounts for your Mortgage
- Heritage Bank Offset Accounts
- ME Bank Ultimate Offset – Mortgage Offset Account
Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Loans.com.au - Dream Catcher | A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 5.85% | 6.21% | $0 / $375 | 80% | $50,000 / $750,000 |
|
 Bankwest Online Home Loan | A low interest rate home loan with a $0 application fee and ongoing maintenance fees. This offer is exclusively available by applying online. | 5.97% | 5.97% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 Illawarra Home Loans Bank Beater Home Loan | A low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
State Custodians Mortgage Company Standard Variable Offset Loan | Awarded Mortgage of the Year 2012 – this multi-award winner features 100% offset and a loyalty 0.25% rate drop after 5 years. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
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