July Rate Review

There are mixed emotions about what the cash rate will do in the next few months, with some experts citing a drop while others expect no change.

What is clearer, however, is the idea that the good days of low rates may be over within the next year or so.

With this in mind, opening a home loan now and building your savings in a 100% offset account could be an effective way to lower the sting of impending rate rises.

Here are the best variable and fixed rate home loans that allow for a 100% offset account

Top 3 variable rate home loans that allow 100% offset accounts:

Reduce Home Loans Rate Buster Fee Free

Interest rate: 3.98%

With a rate under 4% and no annual service fee, this loan is a worthy contender in the variable space. One thing to note is the initial fees, which include a $440 application fee, $330 legal fee and $250 valuation fee – that’s $1,020 you’re going to be forking out before repayments are considered.

BOQ Discount Variable Rate

Interest rate: 4.04%

A loan available to those who have a 20% deposit and don’t mind a $395 annual fee, this loan has numerous value-adding features such as redraw and additional repayment facilities and split options. Yes, you’ll be forking out nearly $400 every 12 months, but this may be offset for your situation by the highly competitive low rate and flexible options.

loans.com.au Dream Home Loan Offset

Interest rate: 4.06%

While you only need a 10 percent deposit for this product, the valuation and settlement fees total $520, which may be a steep consideration for some. You’ll be allowed to make extra repayments and redraws, however the lack of a physical presence may make doing so an interesting process.

Top 3 fixed rate home loans that allow 100% offset accounts:

Bank of Queensland

Interest rate: 4.29%

This loan allows for a minimum 5% deposit, which could appeal to cash-strapped first home buyers (or anyone else tight on money for that matter). You will be able to make extra repayments, but unfortunately you can’t redraw them back out, should you over-commit to your mortgage. The fees in the first year total around $570, with $120 being an annual service fee, so keep that in mind when budgeting for your repayments and total loan costs.

Commonwealth Bank Fixed Rate Wealth package

Interest rate: 4.69%

If you can fork out around $975 in fees for the first year ($375 of this being an annual service fee) you’ll have access to Commonwealth Bank’s Wealth Package, which waives fees and offers discounts on some of their other banking products. The loan itself also has some considerable flexibility-adding features, such as redraw and portability options.

Bankmecu Fixed Rate Home Loan

Interest rate: 4.75%

There’s quite a few of flexible options in this little number, with extra repayments, redraws, split options and 95% insured LVR all being included in the product. If you can stomach the $595 application fee, you’ll have access to a considerable contender in the 3 year fixed space.

Story by Michelle Hutchison.