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90 Marine Terrace Fremantle, WA, 6160

Offset Accounts and Redraw Facilities

Offset Accounts and Redraw Facilities
I’m Brodie Brown, Managing Broker here at BH Brown Mortgage Brokers. Based in Fremantle we specialise in home loans for a range of different situations and work with clients right Perth’s Western Suburbs.

OFFSET ACCOUNTS & REDRAW FACILITIES EXPLAINED

A mortgage offset account is a savings or transaction account that can be linked to your home loan. The balance in this account ‘offsets’ daily against the balance of your home loan before interest is calculated. An offset account can help you cut years off your home loan term and save money on interest.

I’m Brodie Brown, Managing Broker here at BH Brown Mortgage Brokers. Based in Fremantle we specialise in home loans for a range of different situations and work with clients right Perth’s Western Suburbs.
Offset Accounts and Redraw Facilities

OFFSET ACCOUNTS & REDRAW FACILITIES EXPLAINED

A mortgage offset account is a savings or transaction account that can be linked to your home loan. The balance in this account ‘offsets’ daily against the balance of your home loan before interest is calculated. An offset account can help you cut years off your home loan term and save money on interest.

OFFSET ACCOUNTS & REDRAW FACILITIES FAQ

How offset accounts work
If you have a home loan balance of $500,000 and have $10,000 in your 100% offset account, you’ll only pay interest on a home loan balance of $490,000. Because your home loan interest is calculated daily, every dollar in your offset account can save you money in interest. That means more of your repayment goes towards paying down the principal, potentially helping you to repay your home loan faster.

Types of offset accounts available

  • • 100% offset account: 100% of the funds in your offset account are applied against your home loan balance before interest is calculated.
  • • Partial offset account: A partial offset means that part of the funds in the offset account are used against your home loan before interest is calculated. This can be far less effective than a 100% offset account.

Benefits of an offset account

  • An offset account is easy to manage. Simply have your salary and any other income deposited into your account to have an immediate impact on the amount of interest you pay, as the interest on your home loan is calculated daily.
  • An offset account offers convenience and flexibility should you need it, as the account allows transactions and transfers giving you the same accessibility as an everyday transaction account.
  • Some lenders offer multiple offset accounts linked to your home loan, so you can manage your finances while still benefiting from the interest saved on your home loan. This can be a great way to save for big expenses such as a holiday or a new car while still saving on home loan interest.
  • Offset accounts are usually part of a home loan package that incur an annual fee, lower interest rate and other product discounts could still help you save money.
  • An offset account can be more beneficial than a savings account as the interest you may earn on a savings account is less than the interest incurred on a home loan.

Things to consider

  • There are many kinds of offset accounts, and the features will differ depending on the loan type and lender. For example, not all offset accounts are 100%, some may only be partial. Fixed rate home loans may only allow 100% offset for a set period, or other conditions may apply.
  • You may incur monthly fees for having an offset account. It pays to look at the total charges associated with your home loan package to determine if having this product leaves you better off financially.
  • Some lenders may require a minimum balance in the offset account.
  • Weigh up the pros and cons carefully to decide if an offset account is the right product for your situation.
Things to consider for investors
Investors may be able to claim a tax deduction for interest paid on their investment property loan if it is clear that the loan’s purpose is specifically to fund the investment property.

  • These investors often use an offset account to reduce the interest charged to their owner-occupied loan, which is not tax deductible. You could withdraw as much as you like from the offset account for personal use and the loan will still be 100% tax deductible.
  • If there is a possibility that you may turn your existing home into an investment, then having an offset account can be useful. This is because you are effectively building up a cash buffer which you can use in the future to help purchase another property.
  • There may be additional tax advantages of using an offset account for example when you decide to upgrade your owner-occupied home and decide to retain the property as an investment. Money deposited in an offset account can be withdrawn at any.

HOW TO GET STARTED

To get started, call us during business hours on 08-9433-1312 or submit an online enquiry and one of the team will review your request and schedule a time to discuss in more detail.

Doing Finance Differently

It’s what BH Brown does differently to other brokers, banks, loan supermarkets and ‘no service’ digital lenders that ensures the Success of our Clients.

We are Professional Mortgage Brokers, committed to helping Our Clients purchase homes, investment property and projects.

We can arrange construction loans, unlock “hidden equity” to invest and restructure finance for a smooth transition to retirement.

BH Brown excels in solving large, complex, multi-property and multi-entity deals and has the Reputation to prove it.

  • We deliver wealth-focused mortgage and loan advice
  • We make things happen that our clients had been told weren’t able to be done
  • We are all about relationships
  • We take it personally
  • We have every available loan option from Banks to Private Lenders
  • We employ the latest software almost eliminating paperwork and forms
  • We take responsibility and control over the transaction
  • We work for our clients with a sense of urgency
  • We do whatever it takes to make the deal happen
  • We always talk in terms of Your success
  • We Guarantee Our Service

An Impeccable Reputation

Brodie and Josie were complete professionals throughout the whole process. He and his team really do what he says they will do and provide you the best service possible.
Peta Duncan
2024-02-05
Love working with Brodie Brown and his team. Great advice and support. Make the whole process easy:)
Anne-Marie Erickson
2024-02-01
My wife and I had the pleasure of working with Brodie Brown and his exceptional team for our first investment property purchase in Perth. From the moment we engaged with Brodie, we were impressed by his professionalism, efficiency, and depth of knowledge. Brodie and his team made the entire process seamless and stress-free for us. They provided continuous touch points throughout, ensuring we were always informed and reassured that everything was proceeding according to plan. Their attention to detail and commitment to excellence truly set them apart. We are incredibly grateful for Brodie's expertise and guidance throughout this journey. His dedication to finding the best mortgage solution for us was evident in every interaction we had. We wouldn't hesitate to recommend Brodie and his team to anyone in need of a mortgage, knowing they'll be in the hands of a true industry expert.
Jon Butler
2024-02-01
It’s always a pleasure to have Brodie and the team at BH Brown manage our mortgages and finances. They have helped my partner and myself obtain mortgages, refinance, restructure and reorder to best suit our current and often changing needs. If ever we are unsure of something or have a question, just a quick phone call and one of the BH Brown team has us the answer, they never fail to offer us sound, practical and knowledgeable advice and outstanding service. Always the highest possible star rating for BHBrown Mortgage Brokers. I highly recommend them to anyone!
Chad Auth
2024-01-31
I’d been on Brodie’s email list (downloaded AND read the book!) for about 6 months, when Troy telephoned to see how we were going and if we needed anything. I didn’t know it at the time but we were actually in a prime position to refinance our new house away from Keystart! I had no idea. So that’s what we did, with no lenders mortgage insurance required to boot! Troy is very friendly, very patient (we took longer than we should have with paperwork etc…) and very professional. The whole process was very easy and pain-free, and we never felt rushed or pressured to continue until we understood things. Troy has helped us out twice now with finance. He was away on holiday the second time, poor guy, and he still helped us out with cheerfulness. Many thanks Troy!! Oh, and I know full well that Brodie’s emails are marketing, but I really do enjoy reading them and learn from them, and I recommend that you sign up to his list!
Cameron Brown
2024-01-30
Brodie and his team provide excellent service and advice, recommend them in a heartbeat.
Jason Wallis
2024-01-14
Brodie and his team were awesome they listened to our circumstances and guided us through the whole process to get the result everyone wanted thoroughly recommend to al expat kiwis because he likes his rugby aswell thanks team
Megan Michelle
2024-01-11
Did a free one off phone consult and Brodie was great in quickly assessing our situation and giving sound advice. Highly recommended.
Kevin Eipe
2024-01-10
Brodie and the team did a great job of finding me the best loan for my situation, and they made the process easy. Highly recommend.
Tim Fisher
2024-01-07
Brodie has been terrific over the last few years offering reliable property and mortgage advice. Highly recommended.
Jack Selva
2023-12-30
Offset Accounts and Redraw Facilities
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Offset Accounts and Redraw Facilities
Offset Accounts and Redraw Facilities