Can Westpac LOC be offset

[eggnog]

Looking to fix loan soon. Current structure is:

Home loan with house as security + LOC secured against house + offset account offsetting the home loan

If I fix the home loan IR can I still use the offset account to offset the home loan?

If not, can I change the offset account to offset against the LOC?

 

[caporale]

Hi CP

Westpac's offset account will only work against a variable rocket home loan or rocket investment loan, you can't offset against a LOC account or fixed loan with Westpac.

Most of my clients who have or are looking at fixing their loan, who also want the benefits of an offset account, I usually suggest a split loan; part fixed and part variable. The minimum loan size for a rocket loan is $25K. Normally under the pro pack to save on ongoing fees and charges related to multiple loans.

I hope this helps.....

 

[Rolf Latham]

Hiya CP+

What Cappo says makes great sense

Ask for the LOC to be converted to a RRIL IO. That will give access to offset with the classoc plus account AND give you a lower rate to boot !

ta
rolf

 

[Peter_Tersteeg]

Instead of using a LOC, simply use an interest only Rocket loan.

LOC accounts usually cost more (with most lenders). You get almost exactly the same features using and I/O variable but at lower cost. The only downside is that you would have to review the loan when the I/O period ends (usually year 5).

 

[eggnog]

thanks guys. i'll go book an appointment with the bank for next weekend. So, when I meet the loans manager i'll tell her this:

1) fix current rocket repayment home loan for 5 years
2) convert LOC into a second rocket repayment loan and make it IO
3) transfer the offset account to the newly converted LOC/rocket repayment loan

Does this sound correct to you all. Also, couple more questions before I visit the loans manager.

i) will there be any fees associated
ii) current LOC is only $23,800. will this be OK to convert to a second rocket repayment loan
iii) has westpac droped their no LMI policy down to 80% yet. If they have, since total LVR for the 2 current loans on this property is at 85% will there be a review of LMI.

Rolf, what dows RRIL standfor.

 

[bdc]

Rolf, what dows RRIL standfor.

My guess would be Rocket Repayment Investment Loan

Sorry, can't help with anything useful ; D

 

[Qlds007]

Bang on with your definition.

 

[Bill.M.]

thanks guys. i'll go book an appointment with the bank for next weekend. So, when I meet the loans manager i'll tell her this:

1) fix current rocket repayment home loan for 5 years
2) convert LOC into a second rocket repayment loan and make it IO
3) transfer the offset account to the newly converted LOC/rocket repayment loan

Does this sound correct to you all. Also, couple more questions before I visit the loans manager.

i) will there be any fees associated
ii) current LOC is only $23,800. will this be OK to convert to a second rocket repayment loan
iii) has westpac droped their no LMI policy down to 80% yet. If they have, since total LVR for the 2 current loans on this property is at 85% will there be a review of LMI.

Rolf, what dows RRIL standfor.

Fee to switch is usually $300 - however this is waived if you are a current premier advantage package customer. LMI kicks in at 80% - but if your simply switching products with no additional borrowings your existing lmi policy won't be altered.