Offset account attached to fixed or variable portion?

Hi all,
I currently have a 100% variable home loan and am about to convert part of it to fixed.
65% will be fixed and 35% variable.

Should I attach the offset account to the fixed or variable portion? My bank allows either.

 

Assuming both loans are for the same purpose and in the absence of any other info, I'd probably put the offset account against the variable portion (unless you expect to exceed the variable portion). The variable rate is likely to be higher, thus you'll save more interest.

You may find that with a fixed and variable portion, you don't get a choice. Some banks that have offset accounts for fixed rates will put it against the variable portion when you have a split.

 

I would assume the fixed rate is lower and if the lender allowed you attach an offset against a fixed rate then why not fix the whole loan 100%?

 

put it against the loan with the highest interest rate - assuming none of the interest is deductible.