Mortgage Offset Account
- The mortgage offset account balance reduces the interest payable on the home loan account.
- As no interest is actually paid on the mortgage offset account, there is no tax payable to the ATO.
- Overall interest savings as the interest income received on savings account balances is always several percent lower than the interest payable on home loans.
- You pay your mortgage off faster.
- The mortgage offset account is a financial buffer that can be drawn down in emergencies.
Implementation process:
- Have your bank set up a mortgage offset account linked to your home loan.
- Have your salary or wages paid directly into your mortgage offset account.
- Use your credit card for everyday purchases and repay the full credit card balance at the end of each month (to avoid paying any interest).
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"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2