Learn how you can save from an Offset Account
Offset accounts are that little known secret that saves homebuyers thousands. It basically lets you pay off your home loan sooner with fewer hurdles along the way.
It works like a regular cheque account that comes with a cheque book, internet banking access and an ATM card that is linked with your home loan account. Instead of earning interest on the money in your offset account you end up saving on your home loan.
The interest rate on saving accounts is usually much lower than the interest the bank charges you on your home loan. An offset account ensures you are only charged interest on the balance of your home loan account minus the balance of your offset account.
For instance, if you had a home loan of $400,000 and an offset account with $50,000, then the bank would only charge you interest on ($400,000 – $50,000) = $350,000.
Basically if your home loan had an interest rate of 5% per annum while the savings account with the same bank was 3.5% per annum then instead of earning $1750 on $50,000 you would save $2500 of interest by using an offset account.
It is well worth the effort getting your salary deposited into your offset account. When funds accumulate over time, the amount of interest you pay will be far lower. If need be, you can redraw from your home loan account into the offset account. Though in most cases you would ideally want to rely as heavily as possible on the offset account for the everyday ATM and EFTPOS transactions.
At SwitchMyLoan.com.au we specialise in finding you the home loan deal that comes with an offset account so you can save thousands. To find out more, call 1300 307 155, or visit www.switchmyloan.com.au
Call 1300 307 155 and start saving today!
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