What exactly is a home loan offset account anyway? And do you need one?
Assuming you have a home loan, we've identified four types of people who could use a home loan offset account
(actually the people we asked at the Bank of Queensland helped us). Some often imagine you need a significant amount of savings for it to be worthwhile and others simply don’t know how they work. It doesn’t matter whether you are a super saver or a super spender, if you’re a homeowner, you can certainly benefit from the advantages this gives you. Here are four people who could be better off by setting up an account to offset their home loan.
1. The Breadwinner
The easiest way to start offsetting your home loan is to use your working wage. A home loan offset account can be created so that your wage is deposited straight into your designated account. This way the money you earn can be used to reduce your home loan. Yes, in most cases, the money will get spent on a fortnightly, or monthly basis, but any amount of time that you can hold onto in your account will be helpful in reducing your payments.
2. The Renovator
After the house has been bought, the next big purchases are the (lots of) little things that go into actually making it a home. If you’re not handy around the house, renovations can often be an expensive addition, which is why you’ll probably have a savings account set up for this. While your money waits in your account for you to save up for that new kitchen or bathroom of your dreams, you can offset it against your home loan. A home loan offset account can benefit renovators in particular as the money saved is often substantial and sits in the bank account accumulating for a long time - which could mean saving years off your home loan.
3. The Big Spender
The hardest part about saving is spending. There always seems to be something to spend that left over money on every week. Looking at savings sitting in your account can often be too much of a temptation, so give your money a purpose. A home loan offset account will allow you to see your money as being used and you will see the savings in long run. This mean more money for those incidental things later down the track.
4. The Rainy Day Saver
If you’re a super saver and you’re looking for a better way to use your money then a home loan offset account is made for you. Although it is not essential, you will save more time and money on your home loan if you have a large amount in there for longer. Some offset accounts like
BOQ’s Clear Path Variable home loan offer a 100% offset, which could see you using your hard earned savings to potentially save you thousands! It’s time to break open the piggy bank and start seeing your money work for you.
