Money Matters

Finding the (new) mortgage of my dreams

Despite another month of RBA rate inertia, banks are slashing fixed rates in their attempts to maximise market share. Meanwhile, I’ve been on the lookout for the mortgage of my dreams with a handsome 100% offset.

According to Wikipedia, ‘an offset mortgage…reduce[s] the interest charged by offsetting a credit balance against a mortgage debt, with interest charged based on the outstanding net debt.’ Offset also minimises taxable interest accrued from savings account(s).

When I hooked up with my first mortgage, I didn’t even consider offset. Mitchell Watson from Canstar Cannex says that ‘Redraw facilities are targeted towards savers who don’t want to be tempted to dip into their money on a regular basis’ (via The Age) and that was me. A $50 fee seemed like an excellent slap on the wrist should I ever dip into my redraw funds. Offset, on the other hand, required fiscal discipline I lacked.

Over the last couple of years, however, I’ve changed from thriftiness out of desperation to thriftiness out of habit and I think I’m now mature enough to handle an offset account. So how was I going to divorce No. 1 and move onto No. 2? Continue reading

Money Matters

Refinance friction

Dear Mum,

The other day, you yelled at me when I brought up the ‘M’ word in our conversation. You told me that the global economy was flailing, that borrowing rates in America would drop to 0% interest, that I was stupid for wanting to fix rates for a portion of my loan in such a volatile market. You accused me of being a smartarse and not listening to you, before telling me to ‘do whatever I wanted’ in a tone that suggested that if I did choose to ignore your advice, I would not be welcome at your house; any progress we had made towards reconciliation since the day I left home unmarried would be made redundant. Continue reading