joho

Ok since moving here we have an account with Commonwealth and I have been reasonably satisfied with things apart from internet banking and what actually shows. I will try and explain what I mean.

We all have direct debits and most of us forget when one or 2 of them are due out, in England I would log on in the morning and it would tell me what had gone out already and if you were overdrawn you could transfer some money into the account to cover it (if you forgot about it ) no charges and no surprises for the rest of the day. Then any other transactions process after close of day were put under the next days date. Not with the commonwealth if a direct debit is due say in my case the 17th (I thought it was 18th )it never showed up yesterday afternoon when I logged on and today when I logged on it was there showing 17th as the date. This is not the first time I have been caught and I have complained about them doing this as it doesnt give anyone time to rectify the oversight. But anything processed after close of day dated that day is debited as they say at approx 1am in the morning but showing the previous days date. I want a bank that when you log on at 9am in the morning it shows exactly whats in there and what scheduled payment/cheques have been processed for that day so I know if I need to add money or what I have to spend . Does an account exist.

Jo

sid_s

Not very helpful, but all I can tell you is that I'm with NAB and I think they are just the same as Commonwealth. I often login and see something dated the previous day that wasn't there before.

alkristensen

Not being an arse here but........

Put enough in to cover stuff anyway?
and then transfer any back you dont need
just a thought.

DrWho

And we're with Westpac and I think they're the same too...

iPom

Us too, but we've not had this happen yet. Touch wood!

I think the bottom line is that no Australian bank does this. First Direct in the UK seems to be the only bank which does that I know of, and they're great, so maybe worth seeing if HSBC does it?

If you find out, let us know. Intelligent banking doesn't seem to have made it here yet.

Oh and if you're with Westpac, check your statements with a calculator, including mortgage. We found they'd made a $1200 mistake on our account since we've been here! Got it all back of course!

steve99

Assuming you have a home loan, get a rocket repay offset account with Westpac.
Everything you have is in one place, and is all linked together, all your payments are automated etc. You have 3 accounts (Mortgage Account, Normal Current/Savings Account, Credit Card Account)
Basically put as much on the linked credit card as you can each month, have all the income savings etc sitting in your current account, your mortgage account is being offset by everything in your current account on a daily basis, so if you have $50K in there you are saving interest on your mortgage payment of this amount, (so effectively your earning whatever your mortgage rate is as interest, so more than any savings account, because its impact is a saving you dont have to declare it on your tax return and its therefore not taxed like normal earnt interested is)
You set up automated DD's to pay your credit card and mortgage payment out of the normal account at the end of each month. You end up knocking years of your mortgage term and saving thousands of $'s in interest.
Totally straight forward and very simple to manage.

Im sure other banks have the same thing, but we've found our Westpac pretty good.
Steve

chels

I read an article the other day that said that offsets are only worthwhile if you have a substantial amount of savings above what your mortgage repayments would have been - they estimated at least $13,000. Not everyone (particularly with interest rate increases and other financial pressures) can have that much money sitting in their mortgage account, I shouldn't think.


PD 28 September 2006
SN Money Marketing

Do the figures for offset add up to the right mortgage option for borrowers?

Offset mortgages are flexible deals which allow borrowers to link their mortgage to their savings and current accounts. One of the main criticisms of the loans is that they are more expensive than mainstream mortgages.

Virgin One account was the first offset mortgage in the UK in 1997 and more lenders have entered the market. This has helped to close the gap but payable rates are still higher than standard mortgages.

But the rates tell only half the story. For mortgage brokers and clients, the crux of the matter is whether an offset deal will work out cheaper overall than a conventional mortgage and a separate deposit account once the level of interest paid on the savings is taken into account.

With an offset mortgage, any money paid into the linked savings or current account, will not receive interest. Instead, the interest that would have been received will be tax-free and used to pay off the mortgage.

Lenders in the offset market say that as interest rates on deposit accounts are low, taxpayers would be better off with an offset arrangement. They say this is particularly the case for higher-rate taxpayers as the interest they would have received on their savings would be grossed up by 40 per cent.

Coventry Building Society marketing manager, products Edward Sadler says offset mortgages are typically used by professionals and higher- rate taxpayers.

He says: "Savings made on any tax liabilities on interest earned on savings compensates the slight premium on an offset mortgage, which is particularly advantageous for those paying higher rate of tax at 40 per cent," he says.

Some lenders and IFAs think that for the tax efficiency to work, people need a reasonable amount of savings.

Norwich & Peterborough product manager Richard Barker says: "If you have a #100,000 mortgage and only #1,000 in savings, it is probably not worthwhile offsetting because you will be paying a slightly higher headline rate on your mortgage unless you start off with a small amount of savings but know you are going to increase them quite rapidly."

Sadler believes that offsets have wider appeal than Barker suggests, not only to people who have big sums to invest or the ability to earn reasonably sized bonuses but also people that save on a regular basis.

He says: "Instead of overpaying on the mortgage, money can be paid into the savings account, which will still reduce mortgage interest payment but people will also have access to their funds."

There are standard mortgages that offer overpayment facilities, typically, 5 or 10 per cent a year, without penalty but once the overpayment has been made, it is not always possible to draw the money back. Offset deals are more flexible as they allow lump sum overpayments to be made that can then be borrowed back.

For this reason, offsetting can be useful for the self-employed or other people with unpredictable levels of income. Some lenders can also consolidate credit cards and loans under the mortgage rate, which should be lower than the rate of the unsecured loans.

IFAs recognise that some clients will welcome the chance to consolidate their financial arrangements and use the flexibility provided by overpayments, they point out this type of mortgage is far from suitable for everyone.

Independent Personal Financial Management director Luke Gibbon says: "They are a rip-off. I would not recommend them to my clients. I have recommended that a client switches out of hers. When I have looked at offset mortgages in the past, I have always been able to show that my clients would be better off taking a standard mortgage and putting their savings on deposit.

"With an offset, you have got a higher interest rate on your savings but you have also got a higher rate on your mortgage. "My warning to anyone thinking of offsetting is look at the actual net cost of the interest payments less the interest on savings. Banks and building societies love offsets because they are profitable."

But Clayden Associates director Daniel Clayden believes there is a place for offset deals. He says: "My opinion is that the Virgin One account is the most confusing. A lot of offsets have separate accounts but clients will still get the benefit of offsetting. I prefer that, as you can see where you are.

"You need to be more disciplined with the Virgin One account, as you have to make sure that you do not overspend. It is almost like a massive overdraft with interest added on top of that."

He believes the main drawback is it is difficult to find competitive fixed and discounted rates as trackers are the norm. "When comparing mortgages, you should comparing a standard mortgage and the amount of interest you would get n your savings with the offset mortgage. But most offset calculations do not allow you to take into account the interest that you are getting on your savings," he says.

Clayden believes offset is mostly beneficial for clients who have savings of at least #10,000-#20,000 and it would probably save people money if they switch mortgages every two or three years.

He says: "A lot of providers are putting up redemption charges on standard mortgages, which can make it more difficult for clients to swap mortgages," he says.

Barclays intermediary business director David Finlay believes there is scope for creativity when looking at offset deals. He suggests they may be useful where clients have a buy-to-let portfolio, as they can put their rental income into a savings account to offset against their own mortgage. He predicts rising demand for deals enabling parents to offset their savings against their children's mortgages, while still having access to their money.

steve99

Interesting article, but I definitely think there a good thing regardless of what little cash you have elsewhere, whilst everyone might not have a huge amount to offset I would hope that people arent living that close to the line that they only have a few $k's in total savings elsewhere.
I pay a couple of hundred $'s a year which gets me zero account costs, free CC, and a .7% discount on the mortgage rate (plus various other minor benefits).
The main drawback I can see for the account is where people cant control their money properly and instead of seeing it in a totally seperate savings account see it in the offset account so decide to spend it.

chels

What interest rate are you paying? The ones we have looked at tend to be around 7.1 (though there are the less well-known lenders / internet options offering less)

steve99

Im not sure
I cant remember what it changed to when the rate went up the other month, I think with the discount its either 6.89 or 7.14

chels

Did you get it through a broker or with the bank direct?

iPom

I'm inclined to go with a fixed rate.... what say everyone?

steve99

Direct, cant stand middle men
thats why I work in recruitment :scared:

joho

Yeah I know it is my fault for not having the money in there, but sometimes the hubby takes out money without telling me or gets fuel or something and unless I log on I cant double check. Hubby is hopeless with money and leaves all of that stuff to me, most of the time he is brill and asks me which account to use as he knows that sometimes its a fine line at the end of the month. We have a small pot of savings but it seems silly to keep transfering it over and back, I think I will have to convince myself that 150 bucks is the minimum I need in the account and not go below that just in case.

We are on a fixed rate of 6.84 as we decided an offset wasnt for us. We wanted a fixed rate and most of the offsets dont have this facility. I am quite happy with that decision and I make sure that money is in the account each month for sure .

iPom

Good rate for fixed. Currently they're about 7.2 ... Not sure really which to go for.