Parents(or kids) with credit balances sitting around, who are nice enough to forgo their interest for your lifestyle? We see them rock up and get things finely tuned to make the best use of the offset home loan.
How does it work?
Basically bring down your home loan interest costs by using money sitting in other bank accounts, without having to pay off the home loan. You can link bank accounts with home loans and only be charged interest on the difference. You can also link kids with parents.
A couple of things
- You can link multiple accounts with a floating portion of your home loan
- If linking parents account – they have full control of their accounts, will not receive interest & you will be able to see their balance but not their transactions
The repayments?
Your home loan repayments are worked out on the floating rate and stays the same, regardless of how much your credit balances are. However the portion going towards the principle changes based on the linked bank account balances. You will achieve a shorter home loan term as more money is redirected towards the principle repayments.
