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Fixed rate home loans with 100% offset accounts

The secret to minimising interest on a fixed rate home loan.

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Not all fixed rate home loans are lacking in features.

Today, many lenders offer the ability for fixed rate borrowers to make additional repayments, use redraw facilities and take advantage of 100% offset and partial offset accounts.

An offset account works like a regular transaction account. You can have your salary deposited into it, along with any other money you receive. You’ll also receive a debit card which you can use to access the funds. The difference is that funds in the account offset the principal loan amount, thereby reducing your interest repayments. For example, if your home loan balance is $500,000, but you have $20,000 in an offset account, interest will only be calculated in $480,000.

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Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
ANZ Breakfree Package Home Loan - 3 Year Fixed (Owner Occupier, P&I)
2.29%
3.89%
$0
$395 p.a.
90%
Pay no application fee and fix your interest for 3 years with this ANZ package home loan.
AMP Bank Basic Package Fixed Loan - 3 Year (Investor, P&I)
3.99%
3.81%
$0
$0 p.a.
90%
Aussie Elevate Fixed Home Loan - 1 Year Fixed (Owner Occupier, P&I) 100% Offset Loan
3.10%
3.01%
$250
$0 p.a.
80%
A competitive fixed rate home loan from Aussie.
ANZ Breakfree Package Home Loan - 2 Year Fixed (Investor, P&I)
2.49%
4.53%
$0
$395 p.a.
90%
Fund your property portfolio with a low deposit package loan from ANZ. Bundle your loan with credit card and bank account for discounts.
ANZ Breakfree Package Home Loan - 1 Year Fixed (Owner Occupier, P&I)
2.39%
4.16%
$0
$395 p.a.
90%
A competitive package home loan with 100% offset account.
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Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2020 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

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How do fixed rate home loans with 100% offset accounts work?

Fixed rate mortgages let you lock in a rate for a set period, usually ranging between one and five years. Some lenders also offer fixed rate terms for as long as 10 years.

A fixed rate loan with a 100% offset account lets you link an account to your mortgage, with the balance of that account offsetting your principal loan amount. This can save you a considerable amount in interest, and can actively encourage you to save money. As this is a 100% offset account, the entire amount in the account can be used to reduce your principal.

Donny’s offset account

Let’s compare two scenarios with Donny, our savvy borrower.

In the first example, let’s say Donny has a home loan with a rate of 6%. His loan size is $400,000, meaning his repayments are approximately $2,398 a month. At this rate he’ll pay a total of $863,353 over the course of the loan, $463,353 of which is interest.

If he has an offset account and keeps $20,000 in it over the course of his loan, he would pay off his loan three years earlier, and would save $55,759 in interest.

His repayments would still be the same, but more of each repayment would go towards the principal (the original loan amount).

Use our offset calculator to see how much you could save

How to compare these types of mortgages

  • Fixed term. Think about how long you want to be locked into the rate. Terms can range from one to as long as 10 years. Choose a term you think you’ll be comfortable with, and remember that break fees are payable if you exit your loan before the term ends. If you plan to sell your property in the future ensure your fixed term accommodates this.
  • Fees. These type of loans may come with upfront and ongoing fees that could negate the savings you may make in the long run, so remember to take these into account.
  • Additional features. As well as an offset account, the home loan may offer you other features, such as a redraw facility, the ability to make additional repayments, or it may come as a package that offers discounts. Check to see if you stand to make any further savings.

Pros and cons

Pros

  • As the interest rate is fixed your repayments will remain the same during the fixed period.
  • The balance you have in the offset account will be taken off your principal loan amount, actively helping to reduce the amount of interest you pay.

Cons

  • You’re unable to refinance during the fixed rate period without incurring expensive break costs, which may mean you lose out on a much better deal if rates are cut. As with all home loan products, there are a few things to consider before applying. Some offset accounts come with account-keeping fees, so you should look into what you’ll be paying and whether this will eat into your savings.

Offset accounts are also not offered on all fixed rate loans, and may only be offered on more fully-featured home loans. These loans tend to come with higher interest rates and fees, so be sure to calculate the full cost of the loan.

Frequently asked questions

Can you use a 100% offset account to make a home loan repayment?

Yes. The accounts are linked and you can nominate it as your chosen account, but keep in mind this would reduce the balance in your account and affect the interest you pay on your home loan.

Does the offset account earn interest?

No interest will be earned on the balance in your offset account.

More guides on Finder

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Important Information*
Logo for Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)

Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.

Logo for St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)

Up to $4,000 refinance cashback. A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).

Logo for Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.

Logo for UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate

Take advantage of a low-fee mortgage with a special interest rate of just 2.49% p.a. and a 2.49% p.a. comparison rate.

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