If you’re a homeowner or considering buying a property in Australia, you may have heard of mortgage offset accounts. But what are they, and how can they help you save money on your mortgage? In this post, we’ll explore the concept of mortgage offset accounts and their potential benefits.
What is a Mortgage Offset Account?
A mortgage offset account is a transaction account that’s linked to your home loan. The balance in your offset account is offset against your mortgage balance, reducing the amount of interest you need to pay on your home loan.
How Does a Mortgage Offset Account Work?
For example, if you have a home loan of $500,000 and an offset account with a balance of $50,000, the interest on your home loan will be calculated on $450,000 instead of $500,000. This means you’ll pay less interest over the life of your mortgage, potentially saving you thousands of dollars.
Types of Mortgage Offset Accounts:
There are two types of mortgage offset accounts – partial and full offset. A partial offset account is where only a portion of your account balance is offset against your mortgage balance. A full offset account is where the entire balance of your account is offset against your mortgage balance.
Benefits of a Mortgage Offset Account:
Some potential benefits of using a mortgage offset account include reducing the amount of interest you pay on your home loan, paying off your mortgage sooner, and having easy access to your money in case of emergencies.
If you’re looking to save money on your mortgage and have some extra cash, a mortgage offset account may be worth considering. Talk to your mortgage broker to find out more about how a mortgage offset account could benefit you.
