Navigating your home loan can feel challenging, especially when interest rates fluctuate. Whether you’re coming off a fixed rate, adjusting to changes in variable rates, or simply reviewing your options, Teachers Mutual Bank is here to help. Our goal is to make managing your home loan simple and suited to your needs.
Offset Account
An offset account is a powerful tool for saving on home loan interest. By linking your home loan to an offset account, the interest on your loan is calculated on the balance of your loan minus the funds in your offset account. This means the more money you keep in your offset account, the less interest you’ll pay.
Benefits of an Offset Account:
- Reduce your interest repayments: The more money you have in your offset account, the less interest you will pay on your home loan.
- Shorten the term of your loan: By keeping the repayments the same, you can pay off your home loan faster as the offset account reduces the loan balance you’re charged interest on.
- Flexibility: Pay bills, shop online, or withdraw cash using a linked debit card. You can also have your salary deposited into the account
Example: If your loan balance is $400,000 and you have $20,000 in your offset account, you’ll only pay interest on $380,000, potentially saving thousands over the life of your loan.
Redraw Facility
A redraw facility allows you to make extra repayments on your home loan, helping you reduce the principal and save on interest over time. Unlike an offset account, the extra repayments are part of your loan balance and can be accessed if needed.
Benefits of a Redraw Facility:
- Reduce your loan faster: Extra repayments go directly towards reducing your loan principal, lowering your overall interest.
- Access funds for emergencies: Tap into your extra repayments for unexpected expenses or major purchases.
- Flexible repayments: Adapt your repayments to fit your financial goals.
Example: If your required monthly repayment is $2,000, but you pay $2,500, the extra $500 goes directly to your loan principal. Over time, this can significantly reduce your interest and shorten your loan term.
See how much you can save
Use our offset calculator by simply entering your loan details and offset balance to see your potential savings.
