The Offset Effect is a great way to spend less money on interest and pay off your home loan quicker. How does it work? Let’s say you have a home loan balance of $400,000 and $20,000 sitting in your offset redraw facility. With a 100% offset, interest is only calculated on a balance of $380,000 ($400,000 minus $20,000). Every dollar in offset saves you money every day.
Using your offset to reduce the amount of interest you pay on your home loan is like earning high interest that’s tax free. In most cases, your home loan interest rate is going to be higher than your savings account interest rate, so you’re in front when you use your offset. And since the offset doesn't earn interest (it reduces the loan interest that accrues), there’s no requirement to pay tax, like you would on a savings account. Your money is working 24/7 for you, not the taxman.
An offset account is a great feature for borrowers and can help you save time and money off your mortgage. Find out if an offset account is right for you.VIEW ARTICLE
Calculate how much time and interest you could save on your home loan with a redraw offset facility using our handy mortgage offset calculator.VIEW ARTICLE
This feature allows to you offset any cash funds you hold, including your salary, against your loan balance and save on interest.VIEW ARTICLE