Fixed Loans with 100% Offset accounts

I have been looking at different loan options recently and I came across Bank Australia Premium Home Loan which offers fixed interest rates as well as an unrestricted offset account, at least that's my understanding.

I am wondering if banks only started to offer this recently and if there are other banks that are know to offer such a setup. I also wanted to check if anyone had any experience with Bank Australia.

Thanks in advance

 

Adelaide Bank have offered fixed loans with offsets for nearly 20 years now.
ANZ offer too with their 1 year fixed

 

I'm aware of Adelaide Bank & Bank Australia

 

Railways Credit Union, which now operates under the MOVE bank brand, also offers 100% offset for their fix rate loans (complete package fee - $395 /year). They are very small lender based in Brisbane.

 

I have been having other discussions about this type of loan, and it seems like not many people are aware of such products . Even the brokers don't seem to be really enthusiastic about it.
Is there any catch or downside for having a a fixed loan with 100% offset option? How come these products don't seem to be recommended?

 

There could still be break costs if you want to or need to move lenders - or pay down the loan.
Harder to debt recycle - but not impossible.

 

is that different than having a split load structure (part fixed and part variable)?

 

Yes

 

so fixed and variable don't have breakout cost? Or is the cost amount different?

 

'break costs' refers to the penalty you pay for the ending of a fixed loan before its fixed term is up.

 

One of the most common products we've been doing in recent times is:
ANZ 1 year fixed 2.09% P&I OO
Good balance between 100% offset facility + low rate.
Variable rate for same product in 2.65-2.85% range depending on LTV - so the variable premium is quite high atm.

 

Not everyone passes the serviceability test with those lenders, but they are certainly recommended by me whenever someone is looking for a fixed rate and has good serviceability, as long as it's in line with their requirements and future goals.
Who have you spoken to that made you come to that conclusion that they don't seem to be recommended?

 

I have spoken to a couple of brokers (4 so far) while trying to pick one, and it seems unless I asked for it specifically, no one propose it as an option.

 

Doing quite a bit of Adelaide Bank at the moment. 2.05% (owner occ). It's great for a 'set and forget' with an offset. The investment product is quite sharp as well.

 

That's a tiny percentage of total number of brokers out there but I take your point that you would think out of 4 at least one would have suggested it

 

Move Bank and Bank Australia also offers this product

 

Do you mean 2.05% for the life of the loan?
What is the variable equivalent?

 

No, it's 2.05% fixed for up to 3 years. I believe the variable rates are from 2.73%. This is P&I owner occupier. They've got some decent investment products as well.

The variable rate is okay, but not exactly market leading. However when taken in context of the fixed rate, with the offset account for the first 3 years, it looks to me like a good deal.