Offset Facility
An offset account enables you to pay off your loan sooner by reducing your interest payments on your loans. By having an offset facility, the lender only charges interest on the balance of your loan less the balance in your offset account.
To make the most out of your offset account you can deposit your salary directly into your offset account. For certain lenders you can use the offset account as a cheque account, so it can be used for all your daily expenses, and the surplus funds will reduce the amount of interest that you pay. The more money that you have in your offset account, the lower your interest expense will be. Ways to make sure you’re making the most out of your offset account:
- Have your salary deposited directly into your offset account so that the amount of interest you pay will be less.
- Use your offset account for transactions with your debit card including ATM, EFTPOS, internet banking, cheque book and BPAY.
- Repayments are made to the home loan account from the 100% offset account.
Fixed rate Offset Facility
Most lenders don’t offer100% offset accounts for fixed rate home loans. However, at Everrich Finance we have a select few lenders that can consider this type of loan.
Offset Accounts for Investors
If you have an investment property with a tax deductible investment loan then offset accounts can help you. If you make additional repayments into the loan directly and then redraw late, then the portion of the loan may not be tax deductible. This is because the Australian Tax Office looks at the purpose of the funds. If you make additional repayments into an offset account instead of the loan this problem is avoided.
Talk to our Everrich Finance team and we can recommend a lender suitable for you.
*Before making an investment decision please seek independent financial advice from your registered tax agents.