With little room to move on the already record low interest rates of 0.25%pa, once again the Reserve Bank of Australia has decided no movement for now. In fact, it is predicted that this rate will remain for some time.
Do you have an offset account?
In uncertain times, there are ways anyone with a mortgage can improve your financial situation. If you are able to make extra payments on your mortgage via an offset account, it could go a long way to provide a cash buffer and give you peace of mind in uncertain times.
What is an offset account?
An offset account is a separate account that is linked to your variable home loan. The more money you can put into this account ‘offsets’ your home loan interest. In other words, the more money that is in this account, the less interest you’ll be paying.
There are tips to maximise an offset account – you could, for example, have your salary deposited into it. You could also make it your primary savings account.
When it’s necessary, you can withdraw money from an offset account at any time.
Another option similar to an offset account is a redraw facility. We’ll look at that in more detail next month.
If you have any questions regarding your mortgage, please feel free to contact us.