When it comes to choosing the best offset account, it’s not a case of one size fits all. The best offset account for the first time buyer may not be the same as the best offset account for someone who’s nearing retirement. Here’s a guide to some of the factors you need to consider.
One factor to consider when deciding on the best offset account is your personal financial habits. Are you a steady saver or a speedy spender? The answer to that question will help to determine the best offset account for your needs. For example, speedy spenders might find the lure of a current account mortgage hard to resist. But using up the borrowing limit could stretch your mortgage payments for a long time.
And how do first time buyers choose the best offset account?Again, this will depend on their circumstances and financial habits. Some first time buyers may find that the best offset account for them is one that offers a high loan to value and a low introductory fixed rate. This might allow them to get on the property ladder and know exactly what they’re going to pay while they are settling in.
But that type of account might not be the best offset account for all first time buyers. First time buyers might also want to consider a family offset mortgage, where their friends and family can link their savings accounts to the borrower’s offset mortgage. This allows the borrower to pay less interest and it might be the best offset account for a cash-strapped first time buyer.
Other borrowers may be less bothered about interest rates and the number of savings accounts that can be linked. Instead, the best offset account for those borrowers might be the one that offers the best range of flexible features. People with flexible income might appreciate the facility to overpay, underpay, take payment holidays and repay early. However underpayments and payment holidays could increase the mortgage term and/or the total amount payable
However, choosing the best offset account is also about the fine print.In addition to headline interest rates, borrowers need to look at arrangement and product fees (especially if these will be added to the mortgage) and any early repayment charges that might apply. These will all affect the bottom line and will help to determine what the best offset account is.
With so many factors to consider, it’s easy to be confused when it comes to choosing the best offset account. This is where a professional Melbourne mortgage broker can help. With access to hundreds of deals and in-depth knowledge of your circumstances, it is easy for them to find the best offset account for you.
