Mortgage Offset Repayment Variations Calculator
This calculator is only to be used as a guideline. For detailed analysis and advice, always seek professional specialists.
Mortgage offset repayments refer to a feature offered by some lenders that allows you to reduce the interest charged on your mortgage by offsetting it against your savings or transaction account balance. This can help you pay off your mortgage faster and save on interest costs.
There are a few variations of mortgage offset repayments that you may come across:
Full offset account: This type of offset account provides a 100% offset, meaning that the entire balance in your savings or transaction account is offset against your mortgage balance. For example, if you have a mortgage of $200,000 and $20,000 in your offset account, you would only pay interest on $180,000.
Partial offset account: With a partial offset account, only a portion of your savings or transaction account balance is offset against your mortgage. For instance, if you have a partial offset of 50% and $20,000 in your account, your mortgage interest would be calculated on $190,000.
Redraw facility: A redraw facility allows you to make additional repayments on your mortgage and then withdraw those funds if needed. While it is not technically an offset account, it can function in a similar way by reducing your mortgage balance and therefore the interest charged.
Offset with a sub-account: Some lenders offer an offset facility where you have a separate sub-account linked to your mortgage. The balance in this sub-account offsets against your mortgage principal, reducing the interest charged accordingly.
It’s important to note that the availability and specific terms of mortgage offset repayments may vary between lenders. It’s always recommended to carefully review the terms and conditions of any mortgage product and consult with a financial advisor or mortgage specialist to determine the best option for your individual circumstances.
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