This is a good way to save on home loan interest with minimal effort.
Here’s the maths behind it. Interest is calculated daily and raised monthly on your due date every month. If you split your monthly repayments into two fortnightly repayments, or even four weekly repayments, you’re making repayments on your loan more frequently. This means the balance we calculate your interest on every day will be lower.
An added bonus for anyone who gets paid weekly or fortnightly is that your loan repayments can be more aligned to your pay cycle, which can help when budgeting.
Keep in mind that if you’re paying interest only on a Bankwest home loan, you can only make monthly repayments.
An offset account is a bank account that’s linked to your home loan. You can use it like any normal transaction account, but the balance in it ‘offsets’ the amount you owe on your home loan. The interest you pay on your home loan is calculated on this reduced amount. The more you have in your offset account each day, the more interest you could save.
See some tips to help you make the most of an offset account.
The more you pay off, the less interest we’ll charge on your home loan. Even if you make a small extra repayment to your loan every week, the savings can be huge. But don’t just take our word for it – crunch the numbers yourself on our home loan repayment calculator to see how much money and time you could save by paying more off your home loan.
What’s more, with a Bankwest home loan, you can access your extra repayments if you need money down the track – also known as redraw.
Things may have changed since you first opened your home loan, so reviewing it could mean you get a better interest rate, or more flexible features to help you save money long term. Our Home Lending Specialists might be able to help you out – find out more.
If you’re worried about fluctuating interest rates, you could choose to fix a portion of your home loan for an agreed term (of one to five years) while keeping the rest variable for extra flexibility. One great benefit of a fixed rate loan is that your repayments won’t change for the entirety of the fixed term, which could help you to budget.
Our Complete Fixed and Complete Variable Home Loan Packages let you split or switch between fixed and variable any time. Keep in mind that other fees and charges, such as break fees on a fixed rate loan, may apply.
Our Home Lending Specialists can help you work out if splitting your loan is the right option for you.
Lending and eligibility criteria, and fees and charges, apply for our home loans. The Complete Home Loan Package consists of an eligible home loan, one optional eligible credit card per customer and up to nine optional Offset Transaction Accounts per loan.
Consider the applicable product PDS available from Bankwest before deciding whether the product is right for you. Fees and charges may apply and subject to change.
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The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.