Offset account

Discussion in 'Loans & Mortgage Brokers' started by Brian84, 21st Mar, 2019.

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  1. Brian84

    Brian84 Well-Known Member

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    Hi Everyone,

    I know it may have been asked before but i just want to know where is a better place to put extra mortgage repayments?

    Is it better to put extra money into an offset account for the mortgage or is it better to put the extra amount straight onto the mortgage?

    What are the benefits?

    Thanks
    Brian
     
  2. D.T.

    D.T. Specialist Property Manager Business Member

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    Effect on future payments/interest cost is probably about the same.

    Big difference being money in the offset will be reusable because its your own money and so you can use it for anything investment or personal related. Whereas pulling money back out of the loan counts as another loan for tax purposes, and interest is then deductible or not depending on the purpose of the spend.
     
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  3. Eric Wu

    Eric Wu Well-Known Member Business Member

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    Offset for sure.

    1. control of the cash
    2. flexibility
    3. future tax benefit
    4.
    5.

    the list goes on. :):)
     
  4. skater

    skater Well-Known Member

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    Agree with the others. Offset 100% for me.
     
  5. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    Offset. Because you can withdraw the money without permission whenever you like and do whatever you like with it. In the interim, you save mortgage interest.

    Conversely, if you pay the money onto the mortgage, you need to apply to get it back via redraw or equity release loan. If you were going for an equity release loan, you might not qualify under the bank's lending criteria at the time, and accordingly the answer could be "no".
     
  6. Marg4000

    Marg4000 Well-Known Member

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    Offset account - remains your money, spend it however you like.

    Pay it off mortgage - money now belongs to the bank. They may re-lend it to you, or they may not.

    Who do you want to own the money?
    Marg
     

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