Offset accounts explained: A smarter way to manage your mortgage

Offset accounts explained: A smarter way to manage your mortgage

Want to reduce your mortgage repayments and pay off your loan sooner? An offset account can help you do this as interest is only charged on the difference between your home loan balance and the amount in your offset account.  

Here’s why an offset home loan might be worth considering:

Your money, your way

Flexibility is one of the biggest advantages of an offset account. Because it’s linked to a regular transaction account, you can move money in and out whenever you like - just as you would with any other account.

The daily balance in your offset account is what counts. The higher your balance, the less interest you’ll pay on your loan. That means every dollar you keep in there is working for you.

Pay off your loan faster

By reducing your interest charges, setting up an offset account can enable you to chip away at your principal balance more quickly, which in turn reduces your repayments even more.

Example:
Loan = $750,000
Offset account = $50,000
You only pay interest on $700,000 not $750,000

By having your income and savings in an offset account, you’re making it work even harder for you. 

Work smarter with your money

Want to take things a step further? Pairing your offset account with a credit card that has an interest-free period can help you maximise savings.

Here’s how it works:
•    Use the credit card for your everyday spending
•    Leave your cash sitting in the offset account for longer, reducing your interest
•    Pay off the credit card balance in full before the interest-free period ends.

For example, with a 55-day interest-free card, you could cover all your expenses without touching your bank account for nearly two months. That extra time can add up to meaningful savings across the life of your loan.

Save interest and stay flexible

With an offset account, you get both convenience and the potential to save thousands in interest. By making the money you already have coming in work even harder for you, you’re taking big steps toward a stronger financial future. 

We’re here to help 

If you have any questions about how to set up an offset account visit bankvic.com.au/home-buying or call 13 63 73 to make an appointment with a BankVic Home Loan Mentor. 

This information is general only, does not consider your personal circumstances and you should consider its appropriateness & refer to the T&Cs, available on request, before acquiring the product. Fees & charges may apply & interest rates are subject to change. Police Financial Services Limited ABN 33 087 651 661 - trading as BankVic | AFSL and Australian Credit License 240293.