Links Property Finance · Investment property mortgage broker, Sydney: What Is an Offset Account?

Enough that the interest saved each year beats any package fee: at the 6% example rate, each $10,000 held in offset saves about $600 a year, so compare that with the fee.

The arithmetic takes a minute and is worth doing rather than accepting either the sales pitch or the dismissal.

Sometimes: some lenders allow several against one loan, which suits people who keep savings in buckets, others allow one, and some offer only a partial offset. It is a real difference between products, so check before choosing a lender.

They save similar interest, so it comes down to access: offset keeps the money available and the loan balance undisturbed, which matters if the property might become an investment, while extra repayments reduce the debt directly and suit people who would rather not have the money to spend.

No. Interest is calculated on the daily balance, so funds moving in and out change the saving day by day. Many people run their salary through the offset and pay expenses from it, so the balance works while it sits there.

No, and the differences matter. Some offer full offset, some partial, some none, and some restrict offset to particular loan types or to variable portions only. A fixed-rate loan often has limited or no offset available, which is one of the trade-offs in fixing.