A fellow novice here. I own an investment property with around a $500k interest only loan. My current repayment are around $1.3k a month while receiving around $1.7k a month in rent. My plan was to have an offset account linked to this property so that I could park excess cash into it which would keep reducing the monthly repayments I would have to make. With the payments reducing every year and the rent increasing, I thought this was a solid plan. However, I’ve been told by the bank that I’m unable to have offset accounts linked to properties with an interest only loan and that it’s only possible to have offset accounts if the property is secured by a P&I loan. I have heard of people doing this though so I’m very confused. Some advice would be greatly appreciated.
Thank you all :)Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
I think what your Bank should have said is “We dont offer such a product”
Yes IO with offset account definitely exists and we do a number of deals each week for other investors.
Sounds to me like you a good broker to restructure the deal for you.
Yours in Finance
Hi Mr Taylor,
Thanks for your reply, you were indeed correct! I appreciate the advice.
Cheers,TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
ha ha Richard was right. They were being a bit misleading and deceptive when they said that. perhaps a refinance is worth considering
It seems that most banks only provide an offset account if the investment loan securing the property (interest only in my case) is on variable interest and not fixed. Variable interest rate is higher than fixed which increases the monthly repayments and makes this strategy less appealing. Is it possible to have an offset account linked to a fixed interest only investment loan?TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
Is it possible to have an offset account linked to a fixed interest only investment loan?
Yes a handful of lenders offer fixed with offset. Heritage and Adelaide are 2