What are offset account home loans
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What is an offset account home loan?Offset account home loans are home loans that includes a transaction account. The account is directly linked to the http://mozo.com.au/home-loans”>home loan. The balance of the account is “offset” against the sum of your home loan. You are only charged interest on the balance of the home loan minus the amount in the offset account, rather than on the entire sum you owe on the home loan. For example, suppose that you have a 0,000 http://mozo.com.au/home-loans”>home loan at an interest rate of 8%. You currently have ,000 in your offset account. The ,000 is subtracted from the outstanding balance on your loan (0,000), and you are left with 0,000. You will be charged interest based on 0,000 rather than 0,000. That means the interest on your home loan is 8% of 0,000 (,400) rather than 8% of 0,000 (,000). An offset account works like a normal transaction account. To gain the most benefit, you can have your salary deposited directly into your offset account. You can then access your money from ATMs, bank branches or through cheques.There are two types of offset account home loans