Business Loans: Exploring the Offset Account and Terms
Business loans can be used to finance the purchase of a commercial loan property. These loans differ from residential loans because they have different requirements and disbursement periods. Two things that a business and residential loan do have in common is the ability to connect it to an offset account. The other is the length. Typical loans used for commercial property have a length of one to 25 years. Some commercial loans can be stretched to 30 years through amortisation.
An offset account is used to reduce payments that go toward interest. The account is opened and linked to the loan. Clients are expected to maintain a minimum amount such as $1,000 or $5,000. That amount directly offsets the principal 100%. In turn, it reduces the amount that is paid toward interest. Mortgage House may be the first and only Australian mortgage provider to offer 100% interest offset on a commercial loan.
Funds in an offset account are not locked in, but to ensure that the funds work for you, they should be left untouched.
Business professionals have several accounting tools available to them such as depreciation and amortisation. Commercial loans typically go up to 10-15 years, but Mortgage House works with clients that require a longer term to 30 years reducing monthly repayments.
Business Loans Conclusion
Those interested in procuring business loans to purchase a commercial real estate property have the offset account and 30-year loan term available to them. To go over the exact details, contact our Mortgage House lending specialists.