Offset Account

MortgageBiz has a range of flexible variable rate home loans to suit owner occupiers and investors.

Why get a offset account?

It's an account that offsets the balance in that account against the balance of your home loan. This means you pay less interest on your home loan. Over time these savings can really add up and also reduce the time it takes to pay off your loan. 

For examples, if you have a home loan balance of $500,000 and have $10,000 in your offset account you'll only pay interest on a home loan balance  of $490,000. 

Because home loan interest is calculated daily, if your offset accounts offers you 100% offset, ever single cent in your offset account can reduce your home loan interest, every single day. 
100% offset
Every dollar in your offset counts towards reducing the interest on your linked Home Loan, giving you immediate savings.
Easy access
Get all the benefits of everyday account.
No minimum balance
Your entire balance is applied to offset your home loan, no matter how large or small.
Investor-friendly
Keep your accountant happy by easily separating your investment expenses from your personal transactions.
Package option
Package your loan for a home loan interest rate discount and fee waivers.
Your money’s safe
We’ve got your back, with our 24/7 Fraud monitoring and Fraud Money Back Guarantee2.

Key benefits of an offset account

Flexible and accessible
A typical offset account is essentially an everyday transactional account, so it's very easy to deposit and withdraw your funds, especially when compared to a line of credit or redraw facility.
High interest 'return' on your savings
Interest rates charged on home loans are usually higher than interest rates paid on everyday transactional accounts. So while you don't receive interest on your savings in the offset account, the interest that you save on your home loan will typically outweigh potential interest gains.
Interest calculated daily
Interest is calculated daily, so whether you save regularly or live pay-to-pay, as soon as there are some savings in your offset account for more than one day at any point in time, you will benefit from the offset impact on your home loan.
Reducing your tax bill
Savings interest is taxable, but because your offset account balance is used to reduce your loan interest, no tax is payable, so you are effectively reducing your tax bill.

Things to consider with offset accounts

Higher fees
You may have higher monthly or annual fees attached to the account, so it's important to check in with your broker to make sure that you will be financially better off using this option - that is, that potential savings will be greater than the cost of any fees.
Minimum balance
You may need a minimum balance in the account to realise the potential benefits.

In basic terms, if you do not think you can have a regular sum of money saved in your offset account, then you might not be financially better off with this home loan feature.

How MortgageBiz works

1. Information Gathering & Preparation

The key to a smooth approval process is preparation - so it's important to
give some prior thought to your individual circumstances, such as:

  • Your Income & Expense
  • How much you've saved for a deposit
  • Loan features that appeal to you. e.g. flexibility, access
  • Your current and future lifestyle requirements
  • The information and documentation you are required to provide.
2. Conversation With A Home Loan Specialist

It's now time to discuss your home loan requirements and
objectives with a Home Loan Specialist

This step is an opportunity to discuss:

  • Your ability to comfortably make loan repayments - we'll consider a range of factors including income, expenses and liabilities, and any foreseeable changes to your financial circumstances
  • The purpose of the loan
  • Loan types, features, costs, and risks
  • Your future needs
  • The information and documentation you are required to provide.
3. Applications

This is where you, together with your Home Loan Specialist, complete, sign and date the home loan application form and submit all necessary supporting documents for approval.

4. Approvals

Once we receive your application and all required documentation, we will verify the information provided (to ensure it meets our credit policy and requirements) and undertake a credit check if it's required. We will also confirm any conditions on the loan, and, if necessary, undertake a valuation on the property and conduct any title searches.

Your Home Loan Specialist will advise of any additional information required. When formally approved, you will receive a call from your MortgageBiz Home Loan Specialist.

5. Documentation

This is when the home loan contract is issued. We recommend that you check all your home loan documentation thoroughly, before signing, dating, and returning it to us. Check that everything is signed correctly.

6. Settlement

Once all our requirements are met, the loan funds will become available to you. You or your solicitor will need to make arrangements for any settlement with the lender. MortgageBiz will be assisting you all thru the process.

What is a Redraw Facility?
A redraw facility is a home loan feature attached to your mortgage that gives you the opportunity to make extra repayments on your home loan. This helps reduce interest costs. You then have the option to 'redraw' the extra funds.
How is a redraw facility different to an offset account?
A redraw facility acts in a similar way to an offset account by reducing the loan balance used to calculate the amount of interest payable, however, there are significant differences. A redraw facility may be imposed with limitations to the withdrawal amount and the number of redraws allowed per year. You may also be charged a fee for each redraw and can experience a wait for the funds to come through.

Compared to an offset account this is much less flexible and accessible, as an offset is generally set up as an everyday transaction account. Although, keep in mind that the convenience of an offset account may come at the costs of higher interest rates or additional account keeping fees.

Generally speaking, a redraw facility is less suited for investment home loans, because of its potential tax implications. However, it's worth doing the sums to see which one works better for you. Or better still, let a home loan expert crunch the numbers for you.

Frequently Asked Questions

Can’t find the answer you’re looking for? Reach out to our customer support team.

Need some help?

Our experts will help you search, choose and settle your home loan online. Chat to one of our Home Loan Specialists at a time that suits you.
Call Us  1300 149 149 
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