Does Westpac allow more than one offset account?

Discussion in 'Loans & Mortgage Brokers' started by wylie, 7th Oct, 2018.

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  1. wylie

    wylie Moderator Staff Member

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    I'm curious to know if Westpac allows more than one offset account?

    I know I can call them, but asking here might be quicker and less painful than having to identify myself on the phone.
     
  2. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Westpac allow for unlimited transactional and offset accounts however unlike say CBA you can't have multiple offsets linked to the same loan account so its a one offset per loan monogamous relationship.
     
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  3. wylie

    wylie Moderator Staff Member

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    Thanks for the quick answer. We don't have any cash right now, but if we sell something I want to ensure we don't give the bank the idea we don't want the loans if we pay them down.

    Every loan has redraw activated.

    So my plan would be do sit some against each loan in a separate offset.

    We have seven loans so it will work well I think when we do have cash to play with.
     
  4. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Yep no issues and often a big reason why we use Westpac. They also don't charge for the additional offsets which is great.
     
  5. wylie

    wylie Moderator Staff Member

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    If I park funds into an account I'll open, offset against a P&I loan fixed until July 2019, I know my repayment will not change, but I'm guessing it means I could transfer each monthly repayment from the offset into the loan itself.

    And I can do this for more than one loan, one offset account per loan?

    To help me understand this, one loan has a $3k monthly payment, of which $1.5k is interest. So our loan balance is reducing by $1.5k per month.

    If I fully offset the loan, then the $3k monthly payment would reduce the loan balance by $3k per month? Is that right?

    I understand how IO loans work but I've never offset funds against a fixed P&I loan and just want to understand how it works.
     
  6. SouthBoy

    SouthBoy Well-Known Member

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    I have a 'fixed' IP loan with Westpac, and I was told with fixed loans you do not get offset benefits. So any funds in my linked offset account, will not offset the loan. When this loan was a 'variable' IP loan, the 100% offset functionality was available.
     
  7. kierank

    kierank Well-Known Member

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    That’s how my fully chocked P+I loan (secured against an IP) with St George works.

    Every month they take $2,600 out of my Offset and they reduce the loan principal by the same amount.

    The bad news is that they are reducing my tax deductible debt and they they are reducing my cash buffer.

    The good news is that our Net Worth does not change.

    In around 13 years, the Offset will be empty and the loan paid out. But I will be around 75 by then :eek:.

    My loan is variable, not fixed. When the loan is fully chocked, I couldn’t care what the interest rate is :D.
     
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  8. wylie

    wylie Moderator Staff Member

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    Thanks. I have four fixed loans, fixed for another six months.

    Any brokers able to confirm it is pointless for me to sit funds into an offset account against a Westpac fixed loan?

    I can call the bank, but I'm groaning just thinking about it.
     
  9. Brady

    Brady Well-Known Member

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    Who set your loans up with Westpac? Sure they will be able to provide quick response.
     
  10. wylie

    wylie Moderator Staff Member

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    I wish...
     
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  11. Redom

    Redom Mortgage Broker Business Plus Member

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    I think you'll find that the offset facility doesn't work until loans turn variable - but may want to ask your banker to confirm.

    And yes, your understanding of how P&I variable (not fixed) loans with offset is correct. They'll take the scheduled repayment. If its fully offset, it'll all go towards principle repayment. I.e. offset funds won't reduce your scheduled repayment.
     
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  12. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Westpac dont do offsets on fixed loans. Offset cant be linked to fixed loans. Few lenders do. You could break some of the fixed to variable but not all lenders allow a partial break either. If the fixed period is 6 months the cost may even be waived or be under threshold. If the breakcost is less than the benefit it may be viable.
     
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  13. wylie

    wylie Moderator Staff Member

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    I'm on hold now, but have been told I can sit $30k against a fixed loan and my interest will be charged on the balance minus $30k, but sitting more than $30k triggers break costs. I'm on hold with the mortgage area to find out what the break costs would be if I want to sit more than $30k off the fixed loan.

    On one loan the interest each month is $1.5k so depending on the break costs, I'll look at breaking.
     
    Last edited: 14th Dec, 2018
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  14. kierank

    kierank Well-Known Member

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    @wylie, I know Suncorp doesn’t charge break fees if there 4 or less months to go.

    Would be worth checking with Westpac.
     
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  15. wylie

    wylie Moderator Staff Member

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    Just got off the phone. I can break for no cost except an admin fee of $300. That holds for five days. Thanks all.
     
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