An offset account is similar to a savings or everyday bank account except it is linked to your home loan account and works to ‘offset’ your mortgage balance, allowing you to only pay interest on the difference between your principal loan and the balance in your offset account.
A variable rate home loan is one where the interest rate is open to the fluctuations of the market or lender. This means your home loan will likely be affected if there is a rate rise or drop.
A fixed rate home loan is one where the interest rate is locked-down or fixed for a specified period of time, meaning it can’t change.
A bridging loan can help you to get the finance you need to buy a new property before your current property has sold.
A line of credit allows you to borrow in small increments, rather than the total amount at once. This can help you to avoid accruing a large amount of interest by taking out the full loan.
If you’ve paid off the minimum amount on your home loan through advance payments, you are eligible for a redraw through Heritage Bank. This means you will be able to withdraw the extra money you’ve paid, which you can use for any purpose while continuing to pay off your loan. There are two ways you can withdraw from your home loan through Heritage Bank.
The first is by filling out an Application to Redraw Payments in Advance form. You can access this form through Heritage Bank’s website, or contact them to ask for a copy.
You can also apply online through internet banking or Heritage’s Mobile Banking App. However, you will need to already be registered for internet banking to do so, and will need to fill out a Redraw authority form. Once you have done this, you will be able to withdraw money from your redraw facility through online banking at any time — just like you would with any other account. To do this, you simply select the eligible loan account you want to withdraw from, the required amount and the account you want to transfer money to. You can only transfer to a Heritage Bank or other Australian bank account, not BPAY or any international accounts. Your standard Heritage Bank maximum withdrawal limits will also apply.
Like most banks, Heritage Bank charges a discharge fee (otherwise known as a termination or settlement fee) when you finish paying off your loan or refinance with another lender. For their fixed rate home loans, Heritage Bank’s discharge fee is $250.
You may also need to pay a break fee if you pay out and close the loan or switch to another loan type within the fixed loan period. You usually need to pay this when current interest rates are lower than your fixed rate. Heritage Bank calculates this fee by comparing the amount of interest that will be lost due to the fixed term being broken and the projected interest that can be recuperated by re-lending those funds at the current interest rate. Heritage Bank will inform you of any break fees that will apply in your credit contract, payout letter or switch disclosure.
There are various steps involved in applying for a Heritage Bank mortgage.