Plenty of people have mortgage offset accounts,but many don’t know how to maximise their potential.Credit:Aresna Villanueva
Those last two questions are what I’m hoping to shed some light on,along with some ways you can get the absolute most out of your offset (if you have one) and save money on your mortgage each month.
To start,an offset account is a transaction account that’s linked to your home loan. Any money you keep in that account is offset against your mortgage,reducing the amount of interest you pay,and you can access all the money in your offset account whenever you want,without restriction.
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Offset accounts are popular in Australia,with homeowners squirrelling away a whopping $257 billion in offsets as of December last year in an effort to buffer against potential future rate rises. Part of this boom can also be attributed to many people rolling off the ultra-low fixed rates of the pandemic,as many fixed rate home loans do not offer offset accounts.
What’s the problem?
Despite their popularity,it’s likely many of us aren’t using offset accounts to their full potential,missing out on significant home loan savings both in the short and long term.