AFG appoints one of its own to head up AFG Home Loans division

Australia’s largest mortgage broker has appointed Chris Slater, former Head of Sales and Operations for the own label division, to the role of General Manager AFG Home Loans.

Chris has been with the organisation for eight years starting out as a National Account Manager and then moving to the role of State Manager for NSW/ACT in 2008. In 2013, Chris was appointed to the role of Head of Sales and Operations of the growing AFG Home Loans division of the company and has overseen a period of rapid expansion in the portfolio.

Heading up a national sales team, the focus of Chris’ role at AFG will be the strategic development, sales and general management of this emergent division within the company.

AFG Managing Director Brett McKeon said Chris’ hands on experience and intricate knowledge of the business were two key drivers of the appointment.

“Chris has been a key player in growing this part of our business. AFG is a holistic provider of financial services and the AFG Home Loans division is a key plank of our business strategy.

“We offer the best support, systems and business opportunities for our member brokers in the market, and our commitment to our own label division means we can tailor our own products to suit our members’ needs.

“Chris knows our business, knows our members and knows what needs to be done to deliver the results this part of the company is capable of.

“He has played a central role in the development of our strategy to further expand and develop our core product line for AFG Home Loans and I look forward to working with Chris to realize the potential of this line of our business.”

Chris and his family are relocating from Sydney to be based in AFG’s Perth head office this week.

“AFG has given me some tremendous opportunities over the past eight years and to continue to be able to help drive the strategy for the AFG Home Loans division is something I’m very much looking forward to,” said Chris.

Download: Media-Release – Chris-Slater – Head of Home Loans

Save your way to mortgage freedom – savings account or offset account

Australia has once again become a nation of savers. No longer is debt de rigueur. In this post-GFC era, we prefer to play it safe with lower levels of debt and are looking for ways to be debt-free faster.

Savvy savers are making the most of the low-interest rates and their savings by maximising offset accounts. An offset account is essentially a savings account that is linked to a loan account. Instead of earning interest on your savings deposit, the funds are used to offset the loan account.

Your loan repayment remains the same, but more of it is used to pay off the principal, reducing the life of your loan and slashing the amount of interest paid.

How offset accounts work

Lenders generally offer two types of offset accounts: full offset or partial offset.

A full offset account offers you the same interest rate on your savings as what is charged on your home loan. For example, if you have a $100,000 home loan with interest charged at 6%, plus $10,000 in an offset account earning 6%, the lender will offset your loan balance with your offset account balance and only calculate interest on $90,000.

A partial offset account only offers you a standard savings rate, which is lower than the interest charged on your home loan, so one does not completely offset the other. Using the same example as above, a partial offset account might charge the same 6% on the loan but only offer 4% on the savings. Instead of one lot of interest completely offsetting the other, you would pay a reduced interest rate of 2% (the difference between 6% and 4%) on $10,000 of your loan.

Many borrowers opt for a 100% offset account to take full advantage of this feature but speak to your broker for more information about this type of account.


An offset account still allows you to make extra payments on the loan. However, instead of paying more into your actual mortgage, you maintain as high a balance as possible in your savings. This reduces the interest and life span on your loan but gives you all the access and flexibility of a regular savings account, should you need it.

Some lenders even allow you to set up an offset account with a fixed rate loan, giving you certainty around your payments plus the opportunity to get ahead of the debt.

There is also the added benefit of a tax incentive. Because the interest is essentially not earned, you don’t have to include it in your taxable income.

Still in the nest

The key to maximising an offset account is to maintain as high a savings balance as possible. The first step to flesh out your finances is to have your salary paid directly into your savings account. Then it’s a matter of keeping as much of your money in the savings account for as long as possible.

One of the most effective tools is a credit card with a generous interest-free period. Look for a lender offering 55 days interest-free. While it may seem strange to use credit to save, putting as many costs as possible on a card with a long interest-free period can be an effective loan buster. The interest-free period allows you to squirrel away as much of your pay, and any other earnings, for as long as possible to maximise your interest earnings. You just need to make sure you pay off your credit card debt in full before the interest-free period runs out.

What you should consider

An offset account can be a very effective strategy to stay one step ahead of your home loan, providing your spending does not outstrip your savings and you leave your funds to grow over time.

You also need savings to start an offset account. The whole concept fails if you don’t have any savings to leverage in the first instance. You then need to ensure you can maintain surplus cash flow, especially if taking advantage of a credit card with an extended interest-free period. If that’s the case, you will need to be disciplined with expenses, payments and timing. If tempted to put too much on the plastic, the credit card tactic may become a debt trap.

Similarly, if you don’t want to be tempted to overspend, you may be better off injecting any spare funds straight into your loan repayments instead of turning to an offset account.

Look for an offset account that still gives you the standard benefits of a regular savings account: ATM, EFTPOS and telephone and internet banking. Although the aim is to maximise your savings, you still want to be able to access and use your funds as you would with any regular savings account.

Lenders also often charge a higher home loan rate for an offset account. Ask your broker to help you shop around for the most competitive option to suit your circumstances.

If you are still paying off your home or an investment property, but also managing to sock away some savings, an offset account could help you be debt-free faster. Talk to your broker about your circumstances to find out which options may work best for you.

Mortgage Index – March 2015

‘Super Wednesday’ for mortgages as sales surge: February figures

But investor figures remain steady.

Mortgages processed last month by AFG, Australia’s largest mortgage broker, surged 58% higher than in January, and 16% higher than in February 2014 according to figures published in today’s AFG Mortgage Index. The $4.3 billion of mortgages processed in February included a record $280 million processed last Wednesday, 25th February, the largest single day’s volume AFG has recorded in its 21 year history.

Mortgage volumes varied significantly from state to state, with South Australia showing the greatest increase of 31% on February 2014, with NSW up by 25%, VIC by 21%, QLD by 15% and WA going backwards, processing 4% less in volume than in February 2014.

Mark Hewitt, General Manager of Sales and Operations says: ‘February is the real start to the mortgage year and overall we’re off to a flying start this year. No doubt the February rate cut has made borrowers more confident, but it’s important to recognise the significant variations from one state to another. We’re also keeping a close eye on the proportion of investors, but this hasn’t changed on the levels we’ve been seeing for the past twelve months.’

Loans to investors comprised 39.6% of all home loans processed last month, a similar figure to those reported each month for the past year.

Fixed rate mortgages declined as a percentage of all home loans to 13.6%, its lowest since August 2011 when only 9.4% of borrowers chose fixed rate loans. The rise of Introductory loans continued to a fresh high of 7.9% last month, indicating the proportion of borrowers.

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