How could an offset account help your financial situation?

Taking out a home loan is a lifelong commitment that shouldn't be approached lightly. It's important to remember that mortgages can be more than simply a debt – there are a wide range of facilities and add-on's that can make your home loan product a useful tool for wealth generation and future investment. 

This means putting in the hard yards and doing your research before committing to a home loan product. After all, there is no 'one size fits all' concept when it comes to mortgages. Every family and individual have their own requirements and life circumstances that should be factored into one of the biggest financial decisions of any Australian's life. 

One potential option available to you is an offset account, which could be worth giving consideration towards for your first home loan. 

Offset Accounts

If you're hoping to get debt-free as fast as possible, an offset account could be one of the most valuable facilities at your disposal. 

Establishing one of these accounts alongside your home loan will help you to save money in the long run on your repayments, with these savings helping you to further your own living situation and work towards helping you generate as much wealth as possible. 

The basic principal revolves around removing interest payments from your home loan repayments. Any money in your offset account is 'deducted' from your home loan's mortgage calculations, effectively reducing the amount of money you're charged interest on. 

For example, if you have a home loan of $500,000 and an offset account with $50,000, when you make mortgage payments, you will only be charged interested on $450,000. Naturally, there are a lot of benefits to this – especially if you take the time to set aside any extra money to aid your home loan situation.