Offset accounts - what are they and do I need one?
Written on the 27 October 2013 by Adrian De Fazio
It is easy to get confused with the sheer quantity of mortgages available. Do I fix my interest rate or do I ride the rollercoaster of a variable rate? Do I link my loan to an offset account? Do I undertake a loan with a honeymoon rate? There is so much to understand!
For example, if you have a loan balance of $300,000, and your offset account balance is $10,000, interest will only be calculated on $290,000 on your loan. Effectively, this means that you earn interest on the money in your account at the equivalent rate of the loan – which is usually higher than other savings accounts and term deposits!
Author: Adrian De Fazio
Top 10 tips for finding the right mortgage for you...