So you have heard lots about Offset Accounts, but still a little confuddled? Read on, you'll have it right in your mind in no time!

"If you’re looking to shave years and thousands of dollars off your home loan, you might want to consider a mortgage offset account. 

It’s an account that offsets the balance in that account against the balance of your home loan. This means you pay less interest on your home loan. Over time these savings can really add up and also reduce the time it takes to pay off your loan.

For example, if you have a home loan balance of $200,000 and have $10,000 in your offset account you’ll only pay interest on a home loan balance of $190,000.

Because home loan interest is calculated daily, if your offset account offers you 100% offset, every single cent in your offset account can reduce your home loan interest, every single day.

What to consider in an offset account
Not all offset accounts are the same, so it pays to check the details. Depending on the type of loan you choose, you might want to consider a full or partial offset.

A full offset means that 100% of the funds in your offset account will be deducted from what you owe on your home loan before interest is calculated.

A partial offset gives you a reduced interest rate on the part of your home loan equal to the balance of your offset account.

And while your money is working hard to reduce the interest you pay, your offset account will also be every bit as accessible as an everyday transaction account.

How many offset accounts can you have per home loan?
By having multiple offset accounts linked to your home loan, you can manage your finances however you choose while still benefiting from the interest saved by every single cent in your offset accounts. It’s a great way to save for a big spend such as a holiday, a new car, or even another property if you are thinking of investing.

Is an offset account only available with certain types of loans?
Check if your loan is eligible for an offset account by contacting your financial institution. The type of loan may have an impact on the type of offset account available to you (e.g. whether it offers full or partial offset). Fixed loans generally have more limited options in terms of offset accounts, although at the end of the fixed period you may have the option of 100% offset.

Who is an offset account best-suited to?
If you are unable to make additional or lump sum repayments on your home loan, an offset account can give you the benefits of interest-reduction while ensuring your funds are still accessible.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.

You have questions, we have answers - Rachael.

Several times a week, we seem to find ourselves discussing what a Credit Report is with our clients, and how important the contents of each and every one of our reports is to our financial future. Surprisingly, many of our clients, have little to no understanding of what the report is, how to find out what the contents of our individual reports contain, and what the potential implications are of the contents to what we wish to achieve financially.

On many more occasions than I can remember, I recall clients stating that they have taken a personal loan, and a couple of credit cards, so they can start building a credit history, and be able to demonstrate a repayment history, so when they want to achieve what is really important, they have set a precedence of ability to manage their money and debt repayments. Question is, is this an informed decision, and does such action actually achieve the outcome desired? Truth is, it does not, and sometimes, it can actually undermine the bigger goal.

While our Credit Report, now known as Veda Report, contains basic information about our name, address, date of birth, and where we work, it also contains valuable historical financial data, which can have a huge impact on our financial future. 

At Get Smart, we want our clients to be informed as to their options, but also to have a greater understanding and feel empowered, and have greater control of where you want to go and what you want to achieve in the future, and this is why part of our service is to educate our clients about taking financial control, and learning what you can do to get to where you want to go faster. We provide our clients constructive feedback, direction and guidance where needed, and sometimes we have to tell our clients what they need to hear, not what they want to hear, so they can actually start achieving what they want to, and faster.

Want to understand more? Get in contact, we are only too happy to help!

Want to read more? Awesome, a great step towards achieving financial control... you can learn more, by following this link:
http://www.mycreditfile.com.au/education/article.dot?inode=521186
Want a copy of your report? You can get a copy of your report here:
http://www.mycreditfile.com.au


Rachael.