The Money Brief: Fixed, Offset or Revolving Credit?
Understanding Your Mortgage Options
When it comes to structuring your mortgage, there’s no single approach that will suit everyone.
In this edition of The Money Brief, Reagan is joined by Shelley from enable.me to break down three common mortgage structures: fixed, offset and revolving credit, and what you might want to consider when deciding which approach is right for you.
Fixed, Offset and Revolving Credit Explained
A fixed mortgage gives you certainty over your interest rate and repayments for an agreed period. Some homeowners choose to split their mortgage across multiple fixed terms rather than fixing the entire loan for the same period.
An offset mortgage links eligible savings to a portion of your home loan. Those savings can reduce the amount of the mortgage you’re charged interest on, while keeping the money available for its intended purpose.
A revolving credit mortgage works differently again. It operates much like a large overdraft, allowing you to put money in and withdraw it when needed. Interest is generally calculated on the outstanding balance, so keeping more money in the account can reduce the interest you pay.
Finding a Structure That Works for You
Each option has benefits and considerations.
Fixed lending can offer certainty, but fixing for longer can mean missing out if interest rates fall. Offset lending may help make savings work harder against your mortgage, while revolving credit can provide flexibility but requires discipline to use effectively.
You don’t necessarily have to choose just one. Depending on your circumstances, your mortgage could be split across different loan structures and fixed terms.
The important thing is finding an approach that suits your income, spending habits and financial goals, while recognising that what works for you today may change over time.
Could Your Mortgage Be Working Harder for You?
The way your mortgage is structured can influence how you manage repayments, savings and interest over time.
A financial consultation with enable.me can help you understand your current position and explore a mortgage strategy suited to your circumstances and goals.
Watch the Full Episode
Watch the full conversation for a simple breakdown of fixed, offset and revolving credit mortgages, including the potential benefits and considerations of each approach.
Disclaimer: The Where’s My Money? podcast and the information shared by host Reagan White and his guests does not constitute individual financial advice. If you’re interested in receiving financial advice, you can book a consultation with an enable.me financial coach. Costs apply.
