Page 135 - Smart Money

Smart Money

Redraw facility

This allows you to access any extra repayments you have made. Knowing
you have access to funds can provide peace of mind. Be aware lenders
may charge a redraw fee and have a minimum redraw amount.

Repayment holiday
You can take a complete break from repayments, or make reduced
repayments, for an agreed period of time. This can be useful for travel,
maternity leave or a career change.
Offset account

This is a savings account linked to your home loan. Any money paid
into the savings account is deducted from the balance of your home loan
before interest is calculated. The more money you save, the lower your
regular home loan repayments. You can access your savings in the usual
way, by EFTPOS and ATMs. This is a great way to reduce your loan
interest, as well as eliminate the tax bill on your savings. Lenders provide
partial as well as 100% offset accounts. Be aware the account may have
higher monthly fees or require a minimum balance.

Direct debit

Your lender automatically draws repayments from a chosen bank account.
Apart from ensuring there is enough cash in the account, you don’t have
to worry about making repayments.

All in one home loan

This combines a home loan with a cheque, savings and credit card account.
You can have your salary paid into it directly. By keeping cash in the
account for as long as possible each month you can reduce the principal
and interest charges. Used with discipline, the all-in-one feature offers
both flexibility and interest savings. Interest rates charged to these loans
can be higher.

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