Does Offset Reduce The Clients Monthly Repayments?

A successful mortgage broker will be equipped with the necessary experience and knowledge to assist their clients with all aspects of mortgage repayment options. A client inquiring about mortgage offset accounts should be informed that offset has the potential to reduce their monthly mortgage repayments. 

A mortgage offset account is a type of transaction account connected to an existing home loan. Mortgage offset accounts allow clients to deposit additional funds, savings, and income into the account, which then offsets the account balance against the balance owed on the home loan. Offsetting the account balance against the home loan balance allows a client to pay only the interest of the account and the home loan balance difference. 

Offset accounts also have the potential to shorten the life of a client’s home loan! Depending on the individual mortgage broker, a client may have to contact their broker to inquire about reducing their monthly mortgage repayments through an offset account.

If a client is not interested in opening a mortgage offset account but still wants to decrease their mortgage repayments, their mortgage broker can inform them of the following suggestions:

• Refinancing a home loan to a lower interest rate
• Lengthening the terms of a home loan
• Eliminating the client’s mortgage insurance if applicable
• Altering the mortgage repayment schedule to a fortnightly schedule

In addition, if a client entered a mortgage agreement with a low credit score resulting in a high-interest rate, the client has the potential to increase their credit score and renegotiate their current interest rate with their mortgage broker.