02 Jan 2022
Can I Have a 100% Offset Account Against a Mortgage House Fixed Rate Home Loan?
Several tools exist to help homeowners save money while paying off their mortgages. Most tools link to variable rate loans. The tools are made available to encourage homeowners to opt into a variable-rate mortgage. Plus, it’s an opportunity to save on the interest rate charges.
A 100% offset account links to a mortgage. The funds in the account directly offset the principal mortgage amount that remains outstanding. When the principal amount drops, the interest rate charge drops too.
Usually, these accounts are only available for variable-rate loans. Fixed-rate home loans are contracts between borrowers and lending institutions. They are also contracts between lending institutions and wholesalers.
Interest rates do not remain constant. They fluctuate. Thus, a wholesaler agrees to provide the funds at a fixed rate.
An offset account does not lock up the funds. Homeowners maintain access to them. However, if the amount in the account drops, the principal amount increases. Thus, lenders encourage homeowners to leave the account alone. In addition, it’s a good idea to continue depositing funds into it.
Mortgage House provides several tools that help homeowners save on their mortgage repayments. Our loan specialists outline the benefits and how the accounts work. Plus, we offer additional guidance on the borrowing process in the Australian housing market.
Fixed-Rate Mortgage and 100% Offset Account Conclusion
It’s possible to obtain a 100% offset account for a fixed-rate mortgage. Before agreeing to the terms, ensure that you understand the conditions. Fixed-rate loans have restrictions where variable-rate mortgages do not. For additional information, contact our Mortgage House loan specialists.