09 Mar 2022

Crediting All Income to a 100% Offset Account: Why Do It?

100% Offset Account

The cost to finance the purchase of a home is the interest rate. Well-qualified homebuyers can often obtain the best interest rates. However, even they incur the charges. The year 2009 in Australia brought several variations of the mortgage to the forefront. Lenders saw that homebuyers had a tougher time qualifying for conventional mortgages. Plus, the public didn’t trust variable interest rates. 

To help bring trust to the variable rate home loans and to help homebuyers hedge against interest rate fluctuations, lenders developed mortgage minimisation tools such as the 100% offset account.

Mortgage House offers offset features with several variable rate loans. Our loan specialists encourage homeowners to link the offset account to their home loan. Then, we encourage homeowners to deposit 100% of their income into the account. For every dollar placed into the account, the outstanding mortgage principal drops by the same. This leads to tidy savings in interest rate charges.

If a homeowner starts with $5,000 in the offset account and contributes $1,000 monthly, the mortgage amount that incurs interest rate charges drops accordingly. The strategy can lead to significant savings over the loan’s life. Saving $50 or more monthly becomes significant in some households.

To obtain a better idea, take a look at our mortgage repayment calculator online. It’s free and has no strings attached.

100% Offset Account Conclusion

Homeowners who use the 100% offset account strategy can lower the amount they pay toward interest rate charges. Mortgage House provides this feature with several variable interest rate home loans. Contact our loan specialists to find out more.

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