How Does An Offset Account Work?

Understanding How An Offset Account Works

What Exactly Is An Offset Account?

✅An offset account is a transaction account that is linked to your mortgage or home loan.

✅This will reduce the amount of interest you pay compounded over the life of your loan.

✅The balance of your offset account will 'offset' the balance of your home loan, thereby reducing the interest repayment payable.

✅Take a look at Abdullah's story

How Do I Use An Offset Account?

✅Deposit your wages or salary directly into the account.

✅Make your mortgage repayments and pay all bills directly from this account.

✅Leave any savings in this account to 'offset' your mortgage balance.

✅Speak to Mortgage Broker Revesby about refinancing to a home loan with an offset feature.

What Are The Benefits Of An Offset Account?

✅You keep access to your 'extra repayments' in the offset account.

✅Reduce interest repayments by ten's of thousands over the life of the loan.

✅You save more in interest repayments than you would if earning interest in a normal saving account.

✅Save years in mortgage repayments by reducing the interest payable over time.  That's several years of not having to make home loan repayments, all because you left your accessible savings in an offset account.

Do I Earn Interest On My Offset Account?

✅No.  You reap the benefit of not paying interest on that portion of your loan.

✅The money saved in interest repayments is more than the income earned in a savings account.  This is because the lender charges more interest on a mortgage than it pays in interest income on a savings account.

Jason and Emma's story

✅Jason and Emma have a $400,000 variable rate home loan.

✅They keep $40,000 in an offset account tied to the loan.

✅Currently, they pay interest on $360,000 as they have $40,000 saved.

✅Their interest rate is 3%, which gives them monthly repayments of $917.

✅Jason & Emma save $102 in interest repayments per month due to their offset.  That's over $1,200 per year.  And as we learned from Abdullah's story, this compounds in your favour to a princely sum over the life of the loan.

✅They can access this money whenever they need it.

Speak to Mortgage Broker Revesby about how refinancing to a home loan with an offset account can save you money over the life of the loan.

No fee service.

Matthew Stack

matthew@mortgagebrokerrevesby.com.au

www.mortgagebrokerrevesby.com.au

0423 237 242

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