An offset account is a transaction account linked to an eligible home or investment loan. The money you have in this account could offset the amount you owe on that loan, and you’ll only be charged the interest on the difference. Having an offset account may allow you to save thousands and shave years off your mortgage. For example, if you have a loan of $500,000 and $30,000 in your offset account, you will only pay an interest of $470,000.
The benefits of using an offset account is that you may save time and dollars from your home loan. Even if you don’t have a large sum of money, having your salary/wages deposited into your offset account can help assist with paying down your loan.
When choosing an offset account, it’s important to look for an account that doesn’t limit what balance you can have. Always make sure 100% of the balance is used and the account should be like any other transaction account, with access via a debit card for use at an ATM and allow electronic transfers.
Finding the right offset account can be just as confusing as finding the right loan, make sure you speak with an Oxygen broker today.