How many offset accounts

Hi guys?

If you have a home loan and 3 investment loans all standalone how many offset accounts should you have? What is the best structure?

Thanks

 

Comes down to personal preference to a degree. I prefer:

• Offset Account 1: Personal use, salary, personal expenditure etc
• Offset Account 2: Rental income and expenditure/costs
• Offset Account 3+: Storing of excess equity release funds not in redraw

There's a lot of variation on this dependent on the personal circumstances. it's not always necessary to have an offset account attached to every facility from day 1 (unless you're overflowing in cash and need more places to store it). You'll quickly work out if you need more/less accounts.

 

Corey laid it out nicely.

It also does depend on the loan products you have - some loans don't have offsets that come free. Therefore there may be a cost tradeoff with having new ones applied against each loan.

Plenty split up their personal offset (salary/expenditure) up into multiples - depending on their personal preference and circumstances.

Can have an offset attached to each property if you prefer, or rolled into one offset to track rent/expenditures.

 

1

If you have an offset account against an investment property you will be wasting tax savings. There is no tax reason to segregate different types of income and no need to pay investment expenses from a different account.

But there are other reasons such as budgetting why you might one more than 1 - but ideally all of these would be against the main residence where the lender allows it.

 

Depending on the bank, can have multiple offsets linked to the one loan account (CBA). So can have offset funds split for your own tracking purposes, all offsetting the ppor loan.

 

This is my approach posted in another thread:

The approach I am currently using is to have multiple offset accounts linked to my PPOR (many banks now allow this). It allows me to be more organised. I have these roughly organised as follows:

• PPOR Offset 1 - Everyday expenses ( linked to my debit card )
• PPOR Offset 2 - Loan funding ( used for funding repayments of PPOR, IP loans and credit card )
• PPOR Offset 3 - Primary offset ( this has no cards linked and so is good for security of funds )
• PPOR Offset 4 - Share investment income
• PPOR Offset 5 - Rental income ( also acting as an IP maintenance buffer )
• PPOR Offset 6 - Buffer ( 3 x monthly expenses )

My salary is apportioned each month into #1, #2 and #3.

Intent is to periodically use excess funds above minimum balances I am maintaining in #3 and #5 to top-up share market investments ( only when deductible investment loans are not available ).

#5 is also used for funding investment property maintenance expenses.

I will use #2 pay off my credit card balance in full each month. I am also running a balance alert on this account to make sure my loans will never go into arrears.
The above approach whilst fiddly to setup also makes it easier to reconcile investment and property-related expenses.
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The main difference for me now is I am reinvesting a rough equivalent of all my rental income (into shares) from account #5 (which occurs most months where maintenance expenses don't occur). I also try to reinvest all my share investment income. I focus on investments that give me a percentage return greater than my loan interest rates.

I also maintain my Primary Offset (#3) as a quite substantial buffer in addition to my expense buffer (#6).

 

Nice wombat -Suncorp?

 

Bankwest. I hit their limit with how many accounts I can display in their internet banking ( which is 12 ). I have 3 x bankwest loans, 1 x bankwest credit card and 8 offset accounts.

All my regular bills/expenses/groceries go through my credit card to boost Qantas Frequent Flyer points and I pay down the credit card balance automatically each month.

 

I currently operate with

- Offset for each property (x6)
- Offset for bills
- Offset for savings
- Offset for everyday savings

Was only thinking a few moments ago that I'll likely cut down the 6 offset for each property and just have the one 'Rental Offset'

 

Sheesh...you'll want to be getting the hell out of Bankwest town , the way they are going with I/O and cash out

 

I'm locked in for the time-being. Made that decision back in August.

 

At least you got your equity out and splits established before they closed shop...

 

I've just gone to the AMP product. Allows for a large number of splits and offsets.

Also likes to consider my investment income for servicing. Not an issue now but you'll never know.