Best rate

What's the best rate you have managed to get for IP (paying P&I)
I've been offered 2.49 fixed 2.68 variable with $100k offset

 

what is that?

 

Offset account

 

She probably means 100k of the loan is variable, the rest fixed.

 

What I meant was I was able to have up to $100k of the $600K in an offset if i took up the variable

 

I think you've misunderstood what your broker has offered you.

I think what you've been offered is a 600k loan, 500k fixed and 100k variable. Your broker probably asked you how much in your most optimistic estimate do you expect to be able to save in X years, and I bet you answered 100k.

 

This. Talk to your broker. A good interest rate is only half the story. There's so much more to consider.

 

Nope I'm pretty sure he said that for the fixed it wouldn't allow me to have an offset account, however for a variable I could have up to $100K in an offset. Therefore 2.49% x $600K versus 2.69% x ($600-100K) meant that the 2.69% resulted in less interest charged. Happy to clarify though

 

That doesn't make sense, but maybe there's such a thing as a very limited offset...I don't know. One of the brokers here might be able to clarify.

 

So for example, could you get 200k variable and 400k fixed?

 

IP 2.24% fixed for 3 years.

 

2.19% fixed for 3 yrs with two of the majors. That's the best I could muster.

 

It does make sense. Not all lenders allow you to split or have an Offset account. What her broker has told her is most likely correct.

 

The variable portion would be the Offset I’m assuming in Audrey’s example. So $500k at the fixed rate and the $100k would be variable with Offset account linked.

 

Htopg - would you mind confirming is that for an investment and who your lender is with for the 2.24% fixed?

 

Lacrim which lender is the 2.14% and is that for an investment property?

 

Yes David 02 that's correct it's on the variable

 

The way you've explained it here sounds like you've been given two options,
1) fixed rate for the total amount with a rate of of 2.49% No offset OR
2) variable with a rate of 2.69% with an offset account

Offset account don't have limits, it's not a '$100K offset account' it's an offset account, you could put up as much money in there as you like (although no benefit once more than the outstanding loan balance is in there)

Do you have $100K cash to put in the offset account straight away if you take the variable option?

Chasing the cheapest rate can often mean you end up with a poor lender or product BUT you've got the cheapest rate, I would take the Macquarie offer all day over smaller lenders.

 

2.19%...no, for an OO.