Let’s be honest, talking about offset accounts isn’t exactly a conversation starter at parties. But stick with us here because this humble financial tool could be the key to unlocking some serious savings over the lifetime of your home loan.

What is an Offset Loan?

At its core, an offset account is a transaction account that’s linked directly to your mortgage. Instead of that cash sitting idle in a regular bank account, it gets put to work, reducing the interest you pay on your home loan balance.

Benefits of Offset Loans

Still with us? Good, because here’s where it gets really juicy.

Let’s say you have a $500,000 mortgage at 5% interest. By having $50,000 stashed in an offset account, you’ll only be charged interest on $450,000 of that loan amount. That’s some quick math leading to very real savings.

But the benefits don’t stop there. Offset accounts are flexible, allowing you to deposit funds like your salary, tax return, or any other income directly into the account. Every dollar offsets the amount you’re paying interest on.

Over a 30-year loan term, maintaining an offset account balance of $50,000 could save you tens of thousands in interest repayments. Talk about a game-changer!

Accessing Offset Loan Funds

The best part? You can still access those funds whenever needed, giving you the financial flexibility to cover large expenses or invest elsewhere when the right opportunity arises. Better yet, borrowing money back out of your offset is effectively one of the cheapest interest loans you can get compared with a personal loan.

Imagine what you could do by shaving years off your mortgage and reallocating those future interest savings. A head start on investing for retirement? Paying for your kids’ education? Or finally, taking that round-the-world trip you’ve been dreaming about?

Is an Offset Loan Right For You?

At OneCorp, we’re huge advocates of offset accounts as part of a holistic wealth-building strategy. But we also understand that numbers can make your head spin.

That’s why we work closely with every client to meticulously crunch the figures, map out different scenarios, and ensure you’re leveraging every possible advantage on your journey to financial freedom through property ownership.

An offset account may seem like a small thing, but combined with our guidance, it could add up to some truly massive savings over time. That’s a conversation worth having if you ask us!

Want to learn more, dive into the 5 terms every property buyer should know.