Heritage Bank Think Offsets Redundant

I thought it was april fools day when I read this:

"Now that we have introduced the online redraw capability on our home loans, customers don’t need an offset account."

The spokesperson added: "Rather, they can deposit excess funds right into their home loan account, and reduce the balance owing. By reducing the balance owing, they also reduce the interest they will incur.
Bank withdraws ‘redundant’ offset facility - The Adviser

 

I read that this morning. I figure they couldn't figure out how to make an excel spreadsheet calculate 'net of offset' to pay brokers, so they decided to ditch the offset.

 

Not the first bank that doesn’t know the difference between an Offset account and a redraw

 

Heritage by name and by nature - taking us back to the good old days. Roll on the 18.5%pa mortgage rates.

 

Almost as crazy as asking if a dividend is a capital gain

 

I see they have updated the story. Maybe only some of their offset (ie partial offset) accounts are impacted.

Does anyone still use a partial offset account?

 

Not this bunny!!!

 

Had me worried for a moment that my Heritage offset was going to be taken off me but it's just new partial offsets they won't offer anymore. They'll still offer the full offset (Mortgage Crusher) to new clients

 

Not has bad as I first thought, but their comments are still a worry.

 

A couple of years ago, we had a meeting with the Loans Manager at our local Dragon Bank.

He wanted us to withdraw all of our personal funds in our Offset account (fully chocked) and deposit them in one of our IP loans. He said if we need the funds, we could do a redraw.

I asked him if he knew the different tax treatment for funds withdrawn from an Offset account vs a redraw. He said yes (but I was pretty sure he didn’t).

I then asked him to show me his certificate that showed that he was registered to give tax advice.

End of conversation .

It is definitely a worry .