Think of your offset as a turbo-charged savings plan
An offset account is a transaction account linked to your mortgage. Every dollar in that account 'offsets' the balance of your loan – reducing the amount of interest you pay every month.
Here’s an example. If you have a home loan of $500,000 and $20,000 in your offset account, your interest payments are calculated on the $480,000. You can use this calculator to work out just how much that could save over the life of your loan if you don’t touch that $20,000.
For some people, this makes more financial sense than parking your money in a high interest savings account – where you’ll likely pay tax on the interest earned.
However, leaving that $20,000 in there doesn’t help you fuel your other dreams, whether that’s your own business or a move overseas. That’s why more than one offset account can help. If you keep each ‘pot’ separate and clearly labelled, you resist the temptation to dip in to fund something else.
“A multiple offset home loan can help in many ways,” explains Katrina Anderson of Sage Loan Services.
She suggests property investors can also set up a separate offset account linked to their home loan, specifically for rent and any investment-related expense payments.
“This maximises the funds in the offset account to reduce the interest payable on your non-deductible debt – your own home loan – but keeps your deductible investment property loan account balance at its highest.”
If you’re thinking about starting your own business, sole traders could temporarily put business-related funds into their offset account - such as GST or PAYG tax before the BAS is due. “Because it’s a separate account from your personal expenses, it’s easier for accounting purposes. You can then transfer the funds back to the business for payment,” explains Anderson.
You can also create an offset account to build up surplus funds to invest in shares. Whatever your goals, it’s a smart way to fast-track your savings.
It's your money. Get a real-time view of it.
If managing all those accounts sounds a bit complicated, that’s where Macquarie’s digital tools make a real difference. Account transfers can be made on your phone, in real-time. And you can get a debit MasterCard with your offset accounts – which you can also use overseas.
Every card transaction is automatically categorised, so you can keep an eye on your budget without thinking about it. Intuitive search makes it easy to find transaction information on your phone – you can even check the exact location of a purchase.
This is a digital bank account designed for the way we live today. And it’s this complete package that makes it such a smart first home loan. One that can back your dreams, and give you the freedom to make the choices you want – no matter what opportunities come your way.