The Benefits of an Offset Account

Have you heard of an Offset account? An Offset account is a transaction account linked to your Standard Variable Rate Home Loan or Investment Home Loan. An Offset account can help you pay less interest and shorten the time it takes to pay off your mortgage.

Every dollar in your Offset account reduces the interest payable on the principal balance. Furthermore, the savings in your account will grow over time, allowing you to pay off your mortgage much faster.

How does an Offset account work?

For example, if you have a $400,000 Standard Variable Rate Home Loan with an interest rate of 6% and currently have $50,000 in your linked Offset account, you will only pay interest on $350,000. This is because every cent of the closing balance in your Offset account is used to reduce the balance you are owed on your home loan when calculating interest repayment. This means that the more money you have in your Offset account, the less interest you will pay, which helps you save and pay back the principal quicker.

Another great feature of an Offset account is that in case of an emergency, you can still access your money, as it is just like an ordinary everyday banking account. Although withdrawing your money can impact the amount of interest you are saving, it gives you great accessibility and flexibility.

Understanding the differences between a full Offset account and a partial Offset account

Full offsets provide the optimal advantage since they allow you to utilise your whole account balance to offset your loan interest. Differently, partial offsets permit only a fraction of the loan balance to be offset to reduce interest payments.

Pay down your home loan faster
If you are getting a mortgage on your Enso Home, an offset account could reduce your payable interest.

Benefits of an Offset account

Utilising your salary

With an Offset account, interest is calculated daily, therefore, the more money you have in your Offset account, the more interest you will save on your home loan. For example, every time you receive your salary you should consider putting it straight into your Offset account so that your balance keeps growing and interest will be reduced.

Be consistent with your saving

Aside from typical savings, you may deposit your annual bonus or any additional money into the account to lower the interest on your loan. While you do not receive interest, the interest rate on a house loan is substantially greater, giving you more value for your money. The funds can be withdrawn at any time without charge. Put any additional funds into the account to lower the interest payable and to create an emergency cushion.

Investors may receive tax advantages via offset accounts

Offset accounts are not generating interest and are therefore exempt from taxation. Ultimately, you may pay off your loan more effectively and avoid paying taxes on the money in the account. With this system, investors who are smart with their savings will be able to pay off the principal on their loan much faster, saving them further on interest payable.

Any advice given is general and should be evaluated considering your financial position, requirements, and goals.

Visit our recent builds page to see more of our beautiful, completed homes.

Drop by on the weekend, or schedule a weekday walk-through

Experience the Award Winning Lighthouse 26 Display Home |
11 Fawkner Cres, Anchoridge, Armstrong Creek

Holiday Closure

Our Display Homes will be closed from 20 Dec - 6 Jan

Michael Badman
0438 428 103
  • Sunday
  • Monday
  • Tuesday
  • Wednesday
  • Thursday
  • Friday
  • Saturday
  • 11am–5pm
  • Appointment only
  • Appointment only
  • Appointment only
  • Appointment only
  • Appointment only
  • 11am–5pm

1. Our standard floorplans

Choose from our thoughtfully designed floor plans and facades. They are beautiful, carefully curated new home designs, created with knowledge, emotion and consideration for how you live.

I want a standard build

2. Make ours yours

Choose one of our standard designs and reconfigure it to make it yours. Customise – Change – Create – Invent. Add your personal touch without redesign fees.

I want to make changes

3. Custom homes

It’s your new home, exactly how you imagined it. Starting from scratch, we will work with you to design your new home and help bring it to life. Use your own plans or work with our team who will inspire you to create something truly unique and memorable.

I want a custom build

Enso Homes Pty Ltd
Suite 4, 190 Latrobe Terrace,
Geelong West, VIC 3218

(03) 5240 9300 4.4
 17 Google reviews