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make it! Finance and Investment Blog:

Most variable rate home loan products today come with the option of 100% mortgage offset through the use of savings accounts. Many people are ignoring these to opt for a fixed rate and surety of payments, and as far as I am aware there are no fixed rate products that offer 100% offset (please contact me if you know of any).

UPDATE: 

CUA appears to offer fixed rates in combination with 100% offset. It will be interesting to see if their pricing relative to variable rates differs substantially from other fixed rate offerings to take this into account. Link: CUA’s Fixed Rate Loans

For the disciplined, these can be one of the best investments going. They offer substantial tax benefits, and a very high effective return — if you are disciplined enough not to spend money you have access to. More on that later …

I’ll start with a brief introduction of how a mortgage offset facility works.

The facility basically entails having a bank account opened, of which the balance will be offset against your home loan when calculating interest. Most mortgage offset facilities that I am aware of allow you to have multiple accounts offsetting your loan, without charging any additional fees.

When calculating interest on your home loan, which is calculated on a daily basis (and usually charged monthly), the bank will use the following formula (simplified):

Interest = ((Balance of loan) - (Combined balance of offset accounts)) * Interest Rate

Without an offset facility the formula is simply:

Interest =…