How does 100% Offset work?
A home loan offset account is simply a savings account linked to your loan account. The balance in the savings account is offset against the amount owing on the home loan. Savings in your offset account can work to reduce your loan principal, enabling you to save money and own your home sooner. For example, you might have a home loan of $200,000 and an interest offset balance of $20,000. When interest is calculated on your home loan, it is based on $200,000 less $20,000, which means that interest is charged only on $180,000. Because you make your standard repayments for a $200,000 loan, you will repay your loan sooner, and save money over time.
