A 100% mortgage offset account is very similar to an all-in-one account, rather than putting all your salary and other income into your mortgage, it goes into an account that offsets the interest which is directly linked to your home loan. Any balance in the offset account is 100% ‘offset’ against your home loan.
This reduces the amount of interest you have to repay, making your money work harder for you.
Advantages of mortgage offset loan
* Can save you substantial amount of interest if used correctly.
* Operates like a normal transaction account and has a cheque book, ATM card, etc. attached.
* May have higher monthly fees attached to the account.
* May require a minimum balance in the account