Is there really any negatives to having this type of mortgage? I see not all bank offer this though. Opinions?

jojo76 - 2021-06-14 20:57:00

interested to hear of any negatives also as we recently restructured and included an offset portion. We had done a lot of research in to it, and couldn't come up with any but maybe we missed something ??

jamesnmatt - 2021-06-14 21:11:00

It's a product similar in effect to Revolving Credit, have a read here
https://www.finance.co.nz/guides/offset-mortgage-or-revolvin
g-credit-account

jeffqv - 2021-06-15 10:30:00

revolving credit you get to use the entire mortgage amount right up to the last day of the term. thats also the danger. so easy to go put a boat on the mortgage.

offset simply means that you can have savings in the bank with out being penalised for it. but otherwise its the same as a normal variable mortgage.
you can't put anything on the mortgage (without talking to the bank) but you can use what ever you have in savings. kinda handy when you need repairs done etc.

edit; there is also the reducing revolving mortgage but i don't know if anyone does that here.

Edited by tweake at 1:14 pm, Tue 15 Jun

tweake - 2021-06-15 13:09:00

tweake wrote:

edit; there is also the reducing revolving mortgage but i don't know if anyone does that here.

Had that through Westpac a few years ago, was great for our circumstances.

kacy5 - 2021-06-15 19:14:00

tweake wrote:

revolving credit you get to use the entire mortgage amount right up to the last day of the term. thats also the danger. so easy to go put a boat on the mortgage.

offset simply means that you can have savings in the bank with out being penalised for it. but otherwise its the same as a normal variable mortgage.
you can't put anything on the mortgage (without talking to the bank) but you can use what ever you have in savings. kinda handy when you need repairs done etc.

edit; there is also the reducing revolving mortgage but i don't know if anyone does that here.

the reducing mortgage and the revolving mortgage are 2 separate things. We/I have always had a reducing mortgage (sometimes called a flat rate or straightline reducing) and this is by far the quickest and cheapest (interest wise) way to go. However if the mortgage is large it is not often a viable option. Works best with lower mortgages.

lakeview3 - 2021-06-15 19:21:00

lakeview3 wrote:

the reducing mortgage and the revolving mortgage are 2 separate things. We/I have always had a reducing mortgage (sometimes called a flat rate or straightline reducing) and this is by far the quickest and cheapest (interest wise) way to go. However if the mortgage is large it is not often a viable option. Works best with lower mortgages.

not in this case.
there is such thing as a reducing revolving credit mortgage.
its basically a revolving credit mortgage but the credit is steadily reduced. thats simply to make you keep a head of it.

tweake - 2021-06-15 19:39:00

tweake wrote:

not in this case.
there is such thing as a reducing revolving credit mortgage.
its basically a revolving credit mortgage but the credit is steadily reduced. thats simply to make you keep a head of it.

hmmm ok if you say so….too tempting if you ask me

lakeview3 - 2021-06-15 19:46:00

lakeview3 wrote:

hmmm ok if you say so….too tempting if you ask me

I didn't find it tempting as we always had it well in advance but also used it for our business account payments, worked well and we didn't need to go for loans or overdrafts when another machine etc. was needed.

kacy5 - 2021-06-15 20:09:00

I've got my whole mortgage in offset, with my mother having a current account linked to it. She had some term deposits that she was getting bugger all interest on, so she now basically has a deposit the same size of my mortgage.

Means I pay the bank zero interest and instead pay interest to my mother. We worked out an interest rate that was better than I could get at the bank, and better than she could get on term deposit. Works out as a win win.

Bonus for her is her money stays under her control, we have zero claim to it. Also, unlike a term deposit, she can withdraw some or all of it at a moment's notice without penalty.

esprit - 2021-06-17 00:56:00