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22nd May, 2024

Which Banks Offer Multi Offset Home Loans

Finance Tips
Home Loan Education
Home Loan Tips

What are the Benefits of Multiple Offset Accounts

Unlock the potential of your home loan by utilizing multiple offset accounts. This guide highlights how strategically using multiple offset accounts can enhance your financial control, save money, and accelerate the elimination of your mortgage.

What is a Multiple Offset Account loan

An offset account is a banking account linked to your home loan that reduces the balance on which interest is calculated. Most lenders only allow you to have one offset account per mortgage account which is great but does limit the control of your finances. By using a lender who offers multiple offset accounts, you can strategically distribute your funds, gaining flexibility and enhanced effectiveness over your finances.

Banks & Lenders Offering Multiple Offset Accounts

Several major Australian banks and lenders offer this functionality, providing borrowers with additional flexibility in managing their finances. Notable banks include Macquarie Bank with its comprehensive Offset Home Loan package (enables up to ten FREE 100% multiple offset accounts).

Other key providers of multi-offset account structures include;

– Commonwealth Bank
– Macquarie Bank
– Resimac Home Loans
– uBank
– AMP Bank
– Newcastle Permanent
– ME Bank
– Suncorp Bank
– St George Bank
– Great Southern Bank
– Quodos Bank
– BankWest
– Beyond Bank Australia
– Bank Australia

It’s essential to explore each bank’s specific features to find the best option for your financial needs as not all multiple offset account structures work exactly the same.

Benefits of having Multiple Offset Accounts

Offset accounts act like financial boxes, allowing you to allocate funds according to your needs—such as one account for daily expenses and another for significant purchases or investments. This setup helps you manage your cash flow effectively and monitor your spending.

Tips on Maximizing Offset Account Benefits

The more funds you maintain in your combined multi offset accounts, the less interest you pay on your mortgage. Depositing large or small sums of money not required for use into an offset account can significantly decrease interest charges over the medium to long term given the incredibly powerful effects of compounding interest.

The Mechanics of Offset Accounts

An offset account directly reduces the interest payable on your home loan by offsetting your loan balance with the account balance. This structure is especially beneficial for joint home loan holders, allowing individual financial management while benefiting from the shared reduction in home loan interest.

Enhancing Financial Security Through Offset Accounts

Multiple offset accounts can offer additional financial security. When unforeseen expenses or changes in your financial situation happen (and we all know they do!), these funds have been put into an offset account that you might nickname the ‘Mojo account’ (as the Barefoot Investor, Scott Pape, famously called such an account) can cover costs without resorting to high-interest credit options, or worse still not having any funds at all. This of course helps give you longer-term peace of mind and helps to improve your financial stability.

By understanding and implementing a multiple offset account structure effectively, you can create a more efficient way to take control of your mortgage, making your money work harder for you and moving you closer to owning your home outright.

While multiple offset accounts can offer significant benefits in the right scenario, they may not be suitable for everyone. Consult with a professional mortgage broker, like AXTON Finance to tailor the loan structure to your unique financial situation and goals. Book your 15 minute discovery meeting here.

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