Loan recommendations?

Anyone have experience on LoanAustralia? The product I was looking at was the LOC loan: Line of Credit Loan

LOC up to 90%, 7.14%pa, 100% offset available, no account keeping fees etc. All the features are there, with the lowest rate around and low fees (aside from a deferred establishment fee if bailing out early)

Or can anyone else make recommendations? The features I'm looking for are:
- LOC facility
- Interest only
- 100% offset account
- Low rate / ongoing fees


- MiddleClassMonkey

I am now very confused. After speaking with LoanAustralia staff it appears that they don't offer 100% offset accounts (even though their website states it). The customer service rep (who was very friendly) said it's basically a redraw facility but works just like an offset account would. The "line of credit" is also just taking out additional money, and isn't split from the normal interest payments on your statement. You only have one account and statement does not break up any components.

I actually rang again to speak with someone else, this time they weren't so friendly. But the response was more or less the same.

Is there such as thing as a loan that has offset IO and LOC all in one? Or is it one or the other (offset account or LOC)?

Just when I thought I had a grasp on things everything falls through my fingers

That is very bad form on their part ... I wouldn't expect them to care (or even be aware) of the differences from a tax point of view - they are not advisors ... but I would expect them to call a product what it is. An offset account is completely different from a redraw facility in how it works, regardless of what your intention is from a tax point of view

Do you have a good mortgage broker ? They should be able to help you find a suitable loan at a good rate.

This may be a generalisation but I think you might get more accurate advice from a Mortgage Broker as opposed to a Call Centre Operator.

I can recommend some good ones if you need a referral.

Cheers,

I tried two brokers, one of whom did nothing and the other recommended a loan with CBA. Unfortunately, he did nothing that the bank wasn't openly offering anyway and I was hoping he could negotiate a better rate with them.

Simon, could you PM me some brokers in Sydney?

Thx

Sorry to get a little off topic, but I was under the impression a LOC was just like an oversized credit card. And basically you just pay of what you like as you go etc, and would have access to all your funds via your bank card.

What are the advantages of an offset account?

A little back on topic Ratebusters - Mortgage of the Year 2005, 2006 & 2007! im not sure how they are now, but I think they had some good rates a while back, as low as 6.99% if i recall correctly.

Otherwise try RateCity - The online comparison capital - Home maybe you'll find something on there.

Sorry if im stating the obvious here, heh. Alternatively, ask Simon, or Sim... they know all.

Sk3tChY, those are great websites. I'll call them tomorrow and ask about the details.

I'm starting to think perhaps I am misunderstanding something. Is it even possible to have IO + LOC + 100% offset in one loan? Or do you get a IO + offset then get LOC as a separate loan altogether??

Simon will help you if you ask nicely

Actually Simon, heres a question:
If my house loan is with one loan providor, can you get a LOC against the equity with another providor, and still transfer the equity from the home loan to the LOC easily (perhaps yearly valuations?)

Glad to hear I could be of some assistance.

And someone will correct me if im wrong, but as I said before, I always thought a LOC was basically a giant credit card. I don't think theres IO or offset options with LOC's.

I think they just work like credit cards, each month you need to pay the interest amount and thats it. You normally have your salary/salaries credited to the LOC account, and thats what knocks off the principal.

And they dont have an offset facility, rather a 'redraw' one, because you basically are given a card for the account and can redraw whatever, whenever you want, provided you dont go over your 'credit limit'.

To put things as simple as possible LOC = Giant Credit Card.

Someone of course will corect me if im wrong.

ps: If you could let me know which lender you opt for when you finally go thru with this, could you let me know the top lender you found. I'll be looking into property hopefuly mid 2008.

pps: I looked over your original link for loan australia. You'll note it merely says '100% offset'. It dosen't mention anything about an offset 'account'. By 100% offset they mean, any additional payments you make to the fund 100% offsets your interest.

OK so it's correct to say that LOC is a separate feature that you add to an existing loan?

eg: I get a loan that is IO and has a 100% offset account. Then I add a LOC loan on top of that? Or does the LOC replace the original "IO + 100% offset account loan"?

Can the IO+offset loan be from one provider and LOC from another?

Sk3tChY, I didn't realise there was a difference between '100% offset' and '100% offset account' but I see your point. Still, I consider it misleading.