What is an offset account and how does it work?
An offset account is a separate bank account that sits alongside your mortgage that allows the balance in the account to offset against your loan balance, effectively reducing the interest you pay.
For instance, with the $500,000 mortgage and $100,000 in your offset account, you'd only pay interest on $400,000. It offers flexibility as the funds remain accessible for daily use while effectively lowering your interest costs. This function not only optimises interest savings, but also maintains liquidity, providing a practical approach to managing your mortgage more effectively.
