Benefits of an offset account
An offset account is a transaction account that can be linked to your home loan. It gives you the ability to use your savings to reduce the interest payable on your loan.
How does it work?
|Your Home Loan||With Offset||Without Offset|
|Home Loan Balance||$350,000||$350,000|
|Offset Account Balance||$15,000||n/a|
|Home Loan Balance for Interest Calculation||$335,000||$350,000|
|Variable Interest Rate (p.a)||4.14%||4.14%|
|Interest Payable (p.a)||$13,869||$14,490|
|Interest Reduced by (p.a)||$621||-|
The credit balance of your offset transaction account is offset daily against your outstanding loan balance, reducing the interest payable.
See the example below which shows how an offset account reduces the interest payable by $621 p.a.
Please note that the net interest will vary depending on the daily loan and offset account balances. This example assumes there is no change to the loan or offset balances or the variable interest rate over a 12 month period.
Offset is not available during fixed interest rate periods. When you link a transaction account to an offset facility, you earn no interest under the transaction account even if the balance of the transaction account exceeds the loan balance.