Interest offset mortgage is gaining popularity. It’s a feature that’s designed for home owners with spare cash and who wish to reduce or even offset totally the mortgage interest incurred. It’s available for Singapore residential property loans and Australia home mortgages. Let’s explore what these interest offset mortgages do.
Benefits of an interest offset mortgage
In an interest rates rising environment, you may consider ways to reduce interest payable on your big ticket liabilities such as mortgages. In Singapore, mortgage is often the biggest liability one can have in his or her lifetime. A traditional mortgage product allows you to make partial prepayments on top of the monthly repayments, which will reduce the principal owed. An interest offset mortgage product allows you to reduce interest incurred on the home loan by earning interest on liquid cash you place with the bank.
You start by depositing funds into a savings or current account. These funds will earn similar interest rate as your mortgage loan, subjected to a maximum of your loan principal outstanding. The interests earned on the savings account will then go towards off-setting the interest payable on your mortgage and any excess will go towards reducing the loan principal.
Furthermore, you will also enjoy full flexibility in withdrawing or depositing funds. It’s not a compulsory savings and you are not commited to a certain amount of deposits every month. I
Effectively, your savings is working harder while you sleep. If you are thinking that the mortgage would be paid off earlier, you are absolutely right!
Who provides these mortgages?
With our extensive network of banks and lenders, we market interest offset mortgages for Singapore and Australia residential properties.
For Singapore homes, we offer few interest offset mortgage products. There is usually no mark up in interest rates.
Over at Australia, these interest offset mortgage products are available from banks in Australia.
Contact us today for the best mortgage advice!