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Slay Your St George Home Loan With An Offset Account
St George Bank
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Your home may be the biggest purchase you ever make, costing you hundreds of thousands of dollars, plus interest charges. You can make offers on the price of your property, but there's no controlling how much interest you have to pay, right? Think again.
With an offset account, such as the St George Mortgage Equaliser, you can reduce the amount of interest you pay and could potential save thousands of dollars.
So, how does it work? The St George Mortgage Equaliser works by linking your everyday transaction account to your home loan account. Your income can be paid directly into your transaction account as usual, but the balance of your transaction account works to reduce the amount of interest you pay.
With the St George Mortgage Equaliser, the total balance your transaction account is deducted from your home loan account before interest is calculated. Generally, home loan interest is calculated daily but charged monthly, which means the balance of your transaction account can reduce the amount of interest you are charged every day of the month.
Say you have a St George home loan of $200,000 and a transaction account balance of $10,000. The interest charged to your loan would be based on the difference between the two, i.e. $200,000 minus $10,000, which is $190,000.
Over a number of years, the effect of paying interest on a lower home loan account balance can mean you save tens of thousands of dollars in interest. This means that more of your St George home loan repayment amount will go towards paying off the principal of your debt sooner, which means you could also slash years from the term of your loan.
To make the most of a facility such as the St George Mortgage Equaliser, you should have all of your savings, bonuses and any sources of income paid directly into your offset account.
Some St George home loans offer a partial offset facility, but the best way to reduce your interest charges is with a 100% offset facility such as the Mortgage Equaliser. Find out specifically how much you could save on your home loan by speaking with your financial broker.
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