The benefits of an Off-set account for property investing

A mortgage offset account can be a powerful tool for property investors.

Unlike a redraw facility, a mortgage offset account isn’t part of your investment loan but rather, a separate transactional savings account. Instead of earning interest on this account, the balance in this account "offsets” the interest on the loan that it is linked to.

So for instance, if you buy an investment property and have a loan for $400k with a mortgage offset account and you have a surplus cash savings of $50k that you out into the offset account, the lender will subtract this $50k from the loan balance and only charge you interest on the balance of $350K.

It is possible to get the same outcome from a re-draw facility but it lacks the same convenience as an offset account.

 For instance:

·Some lenders set a minimum redraw amounts & charge a separate fee for each re-draw

·Some lenders can make you wait a few days before you get access to the funds

·Re-draw facilities often lack the transactional characteristics of offset account (like Bpay)

Are you interested in an Offset account for your property investment loan?

Contact us @propertyloans@realrenta.com

Jason Gwerder
Saturday, 22 February 2020

Join our mailing list Receive Free Property Tips and news

Now Partnered With


Contact Us

1300 11 RENT (7368)