Offset Accounts Prove Popular in Current Economy
Offset accounts linked to home loans are becoming popular ways to manage personal finances in the current economic climate, according to mortgage specialist Loan Market.
Loan Market Melbourne broker Alexander Heifetz said structuring a home loan with an offset account attached to it provided a number of benefits for borrowers.
“An offset account is linked to the home loan and any amounts sitting in there offset the amount owing on the loan, and therefore save the borrower interest,” he said.
“Additionally, if you pay any lump sum from the offset account into the mortgage, you can also redraw it later, back into the offset account.
“This of course depends on the purpose of the loan, whether it is an owner-occupied home loan or an investment loan. Offset account holders need to be very careful when increasing the investment loan limit or using the redraw facility in this case since they can easily violate Australian tax laws. It is important to get an advice from a professional.
“An offset account is the perfect way to maximise savings, manage cash flow and decrease the interest component on a loan while not actually changing the mortgage limit.”
Mr Heifetz said offset accounts were becoming increasingly popular, although they were not necessarily the right structure for everyone.
“Everyone wants to pay their home loan off as quickly as possible to become financially independent, but the Australian financial system is quite diverse and choosing the right type of loan and product can be difficult,” he said.
“At the end of the day, the aim of a professional mortgage broker is to assist borrowers, provide the most suitable options to individual financial circumstances and take the stress out of financing a home.”
Further enquiries talk to Alexander Heifetz 0421 892 080