First Mac offset account

Hello,

Does anyone know if firstmac offers offset accounts? Also if they are true offset accounts as i have heard some non bank offset accounts may not actually be proper offset accounts (for tax purposes at least??).
They mention on their site "Fully transactional 100% redraw offset account", what is that?

cheers

 

This isn't a real offset account. Firstmac may have a private tax ruling on it though.

 

From my understanding it is a separate account to the loan with its own account number, Debit Visa can be attached.

As such any payments into it don't get credited to the loan account.

Although as Firstmac is not a bank it can only exist if you have a loan with them, ie the account can only be set up on/after settlement and must be closed prior to loan being paid out.

As it has its own account number and receive a separate statement I don't see how it would present an issue for tax purposes.

 

You should seek legal advice on if the loan meets the requires of an 'acceptable offset account arrangement'. My company has never recommended a client to firstmac.

 

They'll have a banking licence pretty soon by all reports

The redraw offset discussion has been had many times over - the product meets the ATO's definition of an offset.

 

Posted in error

 

Yes missing out on controlling interest in Goldfields Money (BNK) didn't please them though.

Cheers

 

Hi Terry,
I am looking into FM and doing some research here seeing your comment.
Are there specific cons that you refrain from using FM?

Also, has it finally obtained a banking license as was alluded in this thread above?

Thanks,
FXD

 

We use firstmac a fair bit now.

 

Ok thanks.

Specifically with its home loan "Redraw Offset Facility", I am just concerned about
the following wordings:

"Please note the 'offset' is a sub-account of the loan and not a separate deposit account. As such, the funds in the 'offset' are not covered by the government guarantee for deposit accounts."

Am I right in my understanding that in the event if it ever goes belly up, money in the sub-account
may risk irrecoverable & complete loss?

Does it also provide option to redraw/withdraw directly from loan account? Any details or catch?

Thanks,
FXD

 

why would this happen?

 

just try to understand the worst case potential risk of leaving $ in a non-deposit account that's not guaranteed by the government. For example, can FM access that $$ to pay its other creditors??
I dunno and that's why I am asking around here to get some feedback/input from those who have
dealt with them.

 

You would be the borrower. If you owe them $1mil and they go under you would still owe them $1mil.

If you have a $1mil loan with $900k in the offset then you only owe then $100k - before an after their insolvency.

Same with any lender really.

 

OK thanks for clarifying.

My concern is not about how much I owe a lender in such a situation. But rather if I can still freely
pull out the $$ in the offset/withdraw/redraw account unscathed, and if that access is dependent
on the account status being a "deposit account with govt guarantee" as such vs one that isn't.

 

If the lender went under the money in the offset likely would be used to offset the amount you owe the lender. This would be the case with a lender covered by the govt guarantee or not.

 

Firstmac does offer a property offset account. But they also have basic products that have only redraw.

Both have nil monthly or annual fees.

 

That's all about to change, it seems. Kim may just finally get what he has been chasing

Firstmac positions for another tilt at BNK

 

Explanation. Goldfields Money have been acquired (technically rebranded to BNK? as Goldfields was a brand used by BNK...white label stuff) by BNK who may already have owned them ...who have a banking license. Guarantees wont be tested here. There is no loss. Instead what happens to former offsets and loans ? Well the good news is its the same bank really so its more likely old product = new product. So two accounts may transfer (loan + offset)

This sound like the issue when Colonial Mutual were taken on by CBA in 2000. NO $$$ are lost. But old MLC customers with offsets suddenly went to redraw balances of smaller loan balances. Its even possible a fully offset loan could be discharged by that action. Old CML offsets were applied to loans and the redraw recognised. CBA said its not their problem. The purchased MLC and integrated the old MLC accounts into the CBA porfolio on a like for like. CBA didnt actually receive offsets. MLC applied them to loans.