CBA no offset account w/ IO!

[Tambn]

Just talked to my (potential) lender CBA for my first property (my new PPOR).

I was wanting to do IO with offset as I plan to invest in property, and I want some flexibility in case my second property becomes my new PPOR and my first property becomes an IP.

From what I have been reading, IO + Offset is the best way to go because I can build the account up and pay off the principal whenever I want. So if 5 years down the track i move into a new PPOR I can move the cash in the offset account to pay off the principle of the 2nd home.

However, I talked to CBA today and they told me that they do not offer offset accounts with IO loans, only with P + I.
Can someone advise me what is going on here? Should I

1. go to a different lender?
2. get a different advisor? (does she know what she is talking about?)
3. Read more about IO + offset (have I misunderstood what it means?

What is the point of an offset account with a P + I loan? Is it just to pay more off the principle if I want?

Thank you.

 

[Spectre]

find a broker who has more of a clue than the person in the bank.

 

[Sheryn]

find a broker who has more of a clue than the person in the bank.

Tambn

I agree with Spectre.

Also I/O offset is the way to go for PPOR and IP's as it gives you flexibility as long as you can save.


Good luck, Sheryn

 

[s050399b]

I am with CBA, I am IO, I have offset

 

[Buddybee]

It certainly can be done; we have IO with offset (MISA) with CBA.

Actually, now that I type that although our statements are CBA and we have access via CBA netbank, I think that the actual loan paperwork is Colonial.

Cheers
Buddybee

 

[Tambn]

OK so you guys have my confirmed my suspicion that the woman at the bank has no clue. What is the next step? I have no idea where to begin! Thanks for your help.

Edit: signed up to Mortgage choice through their website. Should have gone through a mortgage broker in the first place.

 

[Rob Williams]

OK so you guys have my confirmed my suspicion that the woman at the bank has no clue. What is the next step? I have no idea where to begin! Thanks for your help.

I've come across this before where the bank employee takes a bit if random knowledge and translates it into "advice".
I suspect they are getting IO confused with Fixed Rate. They won't give you a MISA with fixed and the employee is mixing metaphors.

 

[Tambn]

Thanks Rob. Would you mind telling me what MISA stands for?

 

[Bradsdad]

Just talked to my (potential) lender CBA for my first property (my new PPOR).

I was wanting to do IO with offset as I plan to invest in property, and I want some flexibility in case my second property becomes my new PPOR and my first property becomes an IP.

From what I have been reading, IO + Offset is the best way to go because I can build the account up and pay off the principal whenever I want. So if 5 years down the track i move into a new PPOR I can move the cash in the offset account to pay off the principle of the 2nd home.

However, I talked to CBA today and they told me that they do not offer offset accounts with IO loans, only with P + I.
Can someone advise me what is going on here? Should I

1. go to a different lender?
2. get a different advisor? (does she know what she is talking about?)
3. Read more about IO + offset (have I misunderstood what it means?

What is the point of an offset account with a P + I loan? Is it just to pay more off the principle if I want?

Thank you.

1. Unsure as you full situation isn't known. Is there any particular reason why you were attracted to them is the 1st place?

2. Yes and I'd say no

3. You seem to be on the ball unlike your advisor.

Regards
Steve

 

[Bradsdad]

Thanks Rob. Would you mind telling me what MISA stands for?

Ummmm I believe Mortgage Interest Saver Account.

 

[Tambn]

Bradsdad the sole reason I was attracted to them was because I do all of my banking and share trading through commbank and commsec. I will now talk to a mortgage broker about my options. The lady at the bank was adamant that banks do not allow you to have offset accounts attached to Interest Only loans, and that they only do this for P+I loans. I questioned her on this but that was her stance. I am not sure what has gone wrong here if everyone on this forum and everywhere else I have read suggests that IO + offset is the way to go. It seems very strange.

 

[Bradsdad]

Bradsdad the sole reason I was attracted to them was because I do all of my banking and share trading through commbank and commsec. I will now talk to a mortgage broker about my options. The lady at the bank was adamant that banks do not allow you to have offset accounts attached to Interest Only loans, and that they only do this for P+I loans. I questioned her on this but that was her stance. I am not sure what has gone wrong here if everyone on this forum and everywhere else I have read suggests that IO + offset is the way to go. It seems very strange.

Seems like the woman at CBA may need a career change

 

[Amadio]

It seems very strange.

Not strange at all. Banks are full of dimwits.

 

[Bradsdad]

Not strange at all. Banks are full of dimwits.

HOY.....my wife resembles that

 

[Tambn]

HOY.....my wife resembles that

I think you mean resents

 

[Amadio]

HOY.....my wife resembles that

I'm sure the occasional bank employs some bright sparks.

 

[tobe]

Maybe she meant CBA didnt offer a proper offset, for P & I or I/O loans.... MISA is a bit clunky, its not transactional, (you can only move money online from CBA savings to Misa, not from ATM etc) and from memory only transacts in $500 increments.
Why do you want to have your mortgage with the same provider as your share portfolio? I cant see there are any benifits really?

 

[Jonril]

As far as MISA being available only with P + I loan we have been told the same thing by our CBA mortgage broker. I just figured it was a recent change on the part of the loaning policy at CBA...(We took out a new mortgage in December.)

Also be sure to check the details of any "offset/MISA" accounts as they are not all equal. Some do not offset dollar for dollar.

 

[bene313]

You just gotta speak to a broker.

I remember once asking a "lending agent" at bankwest about their products and particulalry offset account. I was told no offset account was available and she couldn't understand why redraw wouldn't be a better option anyway.

Probably got the promotion from bank teller a few weeks earlier.

 

[neK]

I remember once asking a "lending agent" at bankwest about their products and particulalry offset account. I was told no offset account was available and she couldn't understand why redraw wouldn't be a better option anyway.
.

whyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy!!!!

I swear the bank needs to provide better training on this subject. So many people get screwed by this because of this.... me included.

I got told that redraw = offset by a lender at Westpac who at the time had 10+ years experience...

This is kinda reinforced the point that duration of work does not equal actual experience.

http://www.commbank.com.au/personal/home-loans/add-ons/mortgage-interest-saver/default.aspx

The "There is an initial deposit minimum of $1,000 and after that both the minimum deposit and the minimum withdrawal is $500." is a bit of a turn off for me. I like taking $20 when i need it. Imposing a $500 limit is just annoying.