Citi's Mortgage Offset Program

[Arifriekinel]

"Consumers want their banking relationship to deliver greater rewards and value," said Stephen Troutner, Citi's Head of Branch Network and Banking Products for U.S. Consumer Banking. "The Offset Mortgage is a perfect example of how we are helping customers manage their finances by leveraging a broader relationship with Citibank."

The deposits in the customer's Citibank Day-to-Day Savings Account are used to reduce or "offset" the outstanding mortgage balance. Each month, an "offset reward" calculated from savings deposits will be paid by Citi and applied towards mortgage loan principal.

Example: a participating customer with a loan amount of $500,000 at a 3.75% interest rate (3.802% APR)* and a deposit account with a $50,000 balance will initially receive a monthly "offset reward" of nearly $160. This allows them to pay off their mortgage approximately two years faster, and saves over $32,000 in interest over the term of their mortgage.

Innovative Citi Home Loan Program Enables Customers to Pay Off Mortgage Faster and Pay Less Interest - MarketWatch

I put this in the young dreamers section because a mortgage is something most other people here seem to be getting out of instead of entering into. I'm very undereducated about mortgages, I'm wondering how much entering into a program like this would help me pay off a mortgage once I enter into it? I know the bank says one thing, but people with experience typically say another. I wasn't able to find another thread about this program.

Are the benefits of a program like this large enough to head to that bank when it comes time to get a house?

 

[seabourne]

Interesting, thank you. They currently hold my mortgage. I think that this is common in AU, but not generally available in the US, but would be a good way to set up holding for emergency fund cash, and would currently pay far better than other liquid accounts, even if it is limited to 10% of the outstanding balance.