Hi all just want to ask if i have an offset account, and I put 100% of the money i owe into it, what happens to my loan? ie I owe $300k but now have $300k in the offest account. Will the account be closed or can i keep putting money into it?
Assuming you have an interest only facility, $300k in an offset account with 100% interest offest means you pay no interest. The loan is not closed and you can deposit or withdraw from your offset account.
If you are on P&I you may still be required to pay the minimum monthly repayment but there will be no interest and you are paying off principal only.
Thanks Spiro for your help!
And it depends on the bank too, St G in particular are different. One of their offsets actually reduces the principle, even on IO loans.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Also if you go over 100% you will receive a letter from the bank stating that an offset account can be over 100% as it happened to me once.
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