Hi, I know this is mainly an investing forum but you smart people might be able to help me? We have an offset type loan (for our residence) but I am wondering whether we would be better off with a standard variable loan (with a lower rate). We average a couple of thousand in the offset account and the loan is $190,000. Is there a simple calculator or way to work out which loan would be better.
Thanks for any help
Stephen[biggrin]Why dont you get a standard variable with an offset?
Offsets are great vehicles but unless you know where you are going they are not much use.
Can you provide more advice as to your situation and what you wish to achieve.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Stephen
As Simon has stated why not get the best of both worlds.
I don’t have a client that is paying the standard variable rate because I always try and negotiate a better rate for all of my clients even if it is a 0.25 – 0.5% every little helps.
Anything over $150K and you should start to make some savings and your offset account would save you even more.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 7.14%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
Thanks for your replies [biggrin]
We borrowed about $190000 and keep about $2500 in the offset account. Loan is with Westapc at 7.17 percent. I’m just worried that the extra interest is not being more than covered by the offset but I can’t work it out. Thanks for any help.
Cheers Stephen
[blink]Put all of your income into the offset. Use a credit card to pay all costs of living and bills where poss.
Sweep funds from the offset onto the card each month to clear it.
Start a budget so that your savings accrues in the offset.
I suggest you use a lender that gives you a free offset on a lower interest rate.
Check out the Westpac Premier advantage Package.
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks for that,
I’ve just spent my lunch working out my interest and I think I would be better off with the standard variable loan from Westpac. At 6.99% I save a few hundred dollars over a year. I think from my workings I need to have more money in the offset and use the credit card as you suggested. Then I might make some headway. More calculating tomorrow I thnk this is all very interesting.
Cheers Stephen[blink]With a rate of 7.17% sounds like you already have the Premier Advantage Package, giving you 0.4% off the standard variable rate. You would be eligable for a 0.7% discount if your loan was increased to 250k. You could leave the extra 60k in your offset account (so no interest on it) and get the 0.7% off your rate (about a $600/year saving). Just another option.
MikeC
Always Ready.
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