The BankVic Offset Variable Loan gives you the chance to offset the interest charged on your home loan with the balance of a linked transaction account by only charging interest on the difference between your transaction account and your home loan balance.
The downside of this loan is that while you can offset your interest, the variable rates offered by this loan are higher than average.
Pros of this loan include the flexible repayment schedule, which gives you the choice of making weekly, fortnightly or monthly repayments, and the ability to make additional repayments for free.
There’s also a redraw facility available so you can take out funds from any additional repayments you may make.
Pre-approval is offered on this loan and if you move homes during your loan term then you can take the loan with you.
You must be borrowing a minimum of $20,000 in order to be eligible for the Offset Variable Loan, however you can borrow up to 95 per cent of a property’s value, which means you’re only required to put down a five per cent deposit on your property.
But, if you’re borrowing more than 80 per cent of the value of your property you will have to pay lenders mortgage insurance. This is an added cost on top of your home loan, but if you know you will have greater funds further down the line, it could be a good way to be able to purchase a property by only having to make a small deposit.
The BankVic Offset Variable Loan is suitable for borrowers who know they can be savvy with the funds they deposit in their 100 per cent offset account, since the advantage offsetting your interest can only be obtained through maintaining your offset account balance.
This BankVic offering could suit someone looking to maximise the use of an offset account, however the high interest rate is a deterrent.
That said, this loan does offer a number of beneficial features so if you are already a BankVic member and like the service they provide then it could be worth prioritise each of these features as a part of your home loan checklist to see if it stacks up.
The Offset Variable Loan is offered as a home or investment property loan. Find out more information about each option by clicking the links below.
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