All Topics / Finance / Offset Account

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  • Profile photo of ShOw_Me_ThE_MoNeYShOw_Me_ThE_MoNeY
    Member
    @show_me_the_money
    Join Date: 2004
    Post Count: 80
    October 22, 2004 - 3:21 am

    Guys can someone explain what an Offset account it?

    Thanx

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781
    October 22, 2004 - 3:46 am

    Basically an account with the bank. It doesn’t pay interest on funds within however the funds held in it “offset” your mortgage.

    Interest is then charged on the difference.

    So if your mortgage is $100 000 and you have an account holding $20 000 which is an offset account.

    Interest on your mortgage will only be charged on the $80 000.

    The mortgage is still $100 000.

    Hope this helps.

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Todays Hot Rate
    3 year fixed – 6.57%

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of high flyerhigh flyer
    Member
    @high-flyer
    Join Date: 2003
    Post Count: 48
    October 25, 2004 - 4:28 am

    Hi Show me,
    Mortgage hunter explains it nicely, but watch out for the differiential rate that some lenders offered. Make sure it is 100% offset!

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