How Do The Clients Calculate If a Mortgage Offset Account Is Worth It?

A mortgage broker assisting their clients with mortgage offset accounts and making additional mortgage repayments should be able to successfully answer any questions they may have regarding these topics. A client can easily calculate a mortgage offset account to see if it is worth it by comparing their loan’s annual cost of interest and fees to how much money they are expected to save every year. 

When the client completes the calculation, if it is determined that they are paying more money than they are saving, they should speak with their mortgage broker about switching to a basic loan with a decreased interest rate. 

A mortgage offset account is a type of transaction account linked up to a current home loan. Mortgage offset accounts allow clients to deposit savings, earnings, and additional funds into the account, offsetting the balance against the amount owed on a home loan. The client will then only be required to pay interest on the difference between the offset account balance and home loan balance. Generally, it is recommended for clients to have a balance of $10,000 in their offset account to make it worthwhile. 

Depending on the individual client, a mortgage offset account may prove more beneficial than making consistent additional mortgage repayments, especially if a client is self-employed and needs to retain a large number of funds to cover personal expenses and bill payments. 

If a client is interested in learning more about the ways a mortgage offset account can benefit their finances, they should reach out to their current mortgage broker to inquire about more information.