Asked by CM Y
I learned this from this website,
Interest-offset Mortgage
Recently most banks have started offering interest-offset packages where you can get same interest rate on part of your deposits and you pay for your mortgage loan. Typically the ratio is 2/3 of your deposit, so it doesn’t fully offset your mortgage interests. The remaining of the deposits will have a lower rate. This is to attract people who have a lot of cash sitting in bank with current very low deposit rates.
For example, your loan is $500k @ 3% interest. And you have $300k in bank - let’s say at deposit rate of 1%.
Your loan interest is $15k / annum. You can get 2/3 of you deposit at 3% and 1/3 at 1%. Your deposit interest is therefore $200k x 3% + $100k x 1% = $7000 / annum. Once you offset the interests, you only pay $8k / annum for the mortgage interest.
My question is any local bank offer this mortgage? if yes, which banks? (btw, how come i never heard of this b4?)
thanks for advising!
Interest-offset Mortgage
Recently most banks have started offering interest-offset packages where you can get same interest rate on part of your deposits and you pay for your mortgage loan. Typically the ratio is 2/3 of your deposit, so it doesn’t fully offset your mortgage interests. The remaining of the deposits will have a lower rate. This is to attract people who have a lot of cash sitting in bank with current very low deposit rates.
For example, your loan is $500k @ 3% interest. And you have $300k in bank - let’s say at deposit rate of 1%.
Your loan interest is $15k / annum. You can get 2/3 of you deposit at 3% and 1/3 at 1%. Your deposit interest is therefore $200k x 3% + $100k x 1% = $7000 / annum. Once you offset the interests, you only pay $8k / annum for the mortgage interest.
My question is any local bank offer this mortgage? if yes, which banks? (btw, how come i never heard of this b4?)
thanks for advising!
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