14 Oct 2021

Can I Have a 100% Offset Account Against a Fixed-Rate Home Loan with Mortgage House?

fixed-rate home loans

Offset accounts and fixed-rate home loans are two of the most popular loan features and options. At Mortgage House, you can get the best of both worlds by having a 100% offset account with a fixed-rate home loan to $20,000.00 per annum. These loans let you lock in your mortgage repayments, while also allowing you to receive the interest-saving benefits of a 100% offset account.

How Do These Home Loans Work?

Fixed-rate home loans allow you to lock in your interest rate for a set time period, usually between one and five years. At Mortgage House, we offer fixed rate loans for a period of one, two, or three years. Our fixed-rate loans with a 100% offset account lets you save money on the amount of interest you pay. Your offset account balance will be subtracted from the balance on your principal loan amount. You will only pay interset on the difference. The money you would normally pay on interest is paid towards your principal loan amount instead, allowing you to finish paying off your mortgage sooner than you would otherwise. 

Benefits and Disadvantages

As with every home loan, having a fixed-rate home loan and a 100% offset account has benefits and disadvantages. The benefits include:

  • Having the same monthly repayment during the fixed period. If the variable interest rate increases, your rate won’t.
  • Your offset account’s balance will be dedicated from your principal amount, reducing the amount of interest you will pay over your loan term. 

The disadvantages include:

  • Being unable to refinance during the fixed-rate period without paying break costs. In addition, if the variable rate decreases, you will be paying more in interest. 
  • Offset accounts may have fees associated with them, which could be more expensive than what you’re saving. 

If you would like to learn more about our fixed-rate home loans and 100% offset accounts, call our lending specialists today.

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