lifestyle n

  • Me bank

    Me bank

    A low cost banking
    solution

    Read more

  • Our people,  our Vision

    Our people,
    our Vision

    We're meeting our
    members and
    sharing their
    stories

    Read more

  • Climate  Action 100+

    Climate
    Action 100+

    We're proud to be one of the global investors
    engaging the world’s largest emitting
    companies to act on climate change.

    Read more

  • A better insurance experience for you

    A better insurance
    experience for you

    From 1 January 2018, your insurance with us
    is moving to MLC Life Insurance, with premiums
    locked in for the next three years.

    Read more

  • How to be a  super woman

    How to be a
    super woman

    Vision Super member, Melinda
    tells us how she is taking
    control of her financial future.

    Read more

A mortgage offset account can offer the ideal combination of easy access to cash savings while helping you pay off your home loan sooner. Our friends at ME Bank explain.

An offset account is an everyday account linked to your home loan. Instead of being paid separate interest on the linked account, the balance is deducted from (or ‘offset’ against) your home loan when loan interest charges are calculated.

Let’s say, for instance, that you have a home loan of $400,000 and $10,000 sitting in the offset account. Instead of paying interest on the full $400,000, the monthly charge will be based on a loan balance of $390,000, thereby providing a big saving on interest costs. 

But the benefits don’t end there. As your regular loan repayments stay the same, the reduction in interest charges means more of each payment comes straight off the loan balance. This reduces the following month’s interest cost, and in this way the loan pendulum starts to swing in your favour.

Plan your cash needs

The more money you have in the linked account, the bigger the savings on home loan interest, and some clever cash management can really boost the benefits of a mortgage offset account.
One strategy worth considering is to use your credit card to pay for a range of household expenses each month, while leaving as much cash as possible in the offset account. When your card statement arrives, dip into the offset account to pay off your card balance in full before interest charges apply. This way, you maximise the balance of the linked account for as long as possible.

If you’re saving for personal goals like an overseas holiday, an offset account can also be used to build funds while still helping you forge ahead with your home loan.

 

This article was provided by ME Bank, a bank that is 100% owned by industry super funds, including Vision Super.

Members Equity Bank Limited ABN 56 070 887 679.

Latest videos

    Twitter feed

    If you have any queries about any superannuation topics we have experts who can help. Call us on 1300 300 820 or em… https://t.co/xNOuxWxGek
    29 June 2020
    RT @cityofmelbourne: A 🌈🌈🌈 to brighten your day. 👏👏 https://t.co/I49LZBTnvT
    17 June 2020