St George and Offset account

Hi there,

Was going to make a call to St George, however, they are closed at the moment. I recently fixed one of my mortgages, so I moved all my cash in the Offset to my St George account which also has an Offset account (Complete Freedom). I moved the cash in on the 5th April (85k) and the monthly repayment date is 21 April. I just logged in and realised the repayment is the same amount as if I had nothing in my offset account. Assuming it's been sitting in the account for 15 days at 4.3% I should be paying at least $150 less in repayment.

Can anyone else who is with St George comment on how the offset works? I do know there is a monthly indicative payment, I'm not sure whether the savings in offset is applied to next months indicative repayment?

I am on the Advantage package and mortgage is linked to my Complete freedom for repayments. I'm assuming the offset facility is activated during the set up of the loan automatically?

Thanks

 

St G used to have an unusual offset account whereby the repayments remained the same but the savings of interest were used to reduce the principal of the loan. They had 2 different versions of the offset.

But I have not used them for about a year so am not sure what is current.

 

Yep, they have 2 offset type. Mortgage Equaliser Offset (PI) and Repayment Offset (IO).

Quick one from their webpage.

"Depending on your repayment type you may be eligible for either Mortgage Equaliser Offset or Repayment Offset

Mortgage Equaliser Offset

• Available to eligible Variable rate home loan customers with principal and interest repayments
• The balance from the nominated accounts is offset against the balance outstanding on your loan.

Repayment Offset

• Available to eligible Variable rate home loan customers with interest only repayments
• The customer must have their repayment set up as an automatic transfer or external direct debit from nominated accounts.
• The interest from the balance of the nominated accounts is offset against the minimum monthly repayment amount, leaving the loan balance and loan term untouched."

 

Assuming you mean for IO since P&I would mean that payment is the same every month and just more goes into paying it off when you have an offset since the payment amount remains the same while interest is lower.

I have IO with St George with a big offset amount and the amount showing for the loan repayment in the loan info up does not take into account the offset, but when they actually take the money out, it does account for it and takes only the interest after the offset is accounted for.

I also asked and was told that interest is calculated daily, so as long as it is in the offset, the interest calculation to be paid is being reduced.

I think I have the Advantage package but can not remember the name. It sounds like it is the same as mine and nothing to worry about, but best to call them to make sure.

 

You need to give them a call and a) find out what offset you have and b) confirm that it's linked up to your variable loan

 

It wouldn't be the first time that an Offset wasn't linked.

I have a St George loan with an Offset. When initially set up, I noticed the interest being charged was the full amount.

I phoned St George and found out they forgot to link the Offset. They linked the two accounts, refunded me some interest and it has worked every since.

 

Not sure about St G, but most lenders offsets do *nothing* once you fix the loan, they are just an account then, not sure if they even attract any interest either.