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Unfortunatey Ali, there's no simple answer/explanation to this. The explanation is complicated if you don't understand how mortgages are funded in Australia. I'll try to explain it; the first thing to know is that whether your lender is a bank, credit union, building society or non bank...

Try to contain that enthusiasm there, Rolf :)

If you scroll back through the posts, there's a copy of the two separate loan account/sub account details which have been posted by an existing ratebusters customer, confirming the product uses sub accounts for the "redraw offset" Can we all finally agree the ratebusters (firstmac) redraw...

Thats cool Perp. That's why we have these forums so we can work these issues out. I would hope you and Rolf and others will be as big an advocate for this product now, as you were opponents. Im not here to promote Ratebusters but I do think brokers and investors need to get up to speed with...

ok... heres the ATO ruling relating to offset accounts, which should address the issue once and for all. Took 3 seconds to Google it. Type in ATO and Offset, and voila! Relates specifically to the definition of an offset account for income tax purposes. Hopefully this provides you guys with...

explain to me how any other offset would be any different.... if used as a transactional account for salary crediting and bill payment...

We'll have to agree to disagree Perp.... its a rather long bow you are drawing. Lenders simply arent responsible for providing taxation or financial advice to borrowers... APRA ensures products are compliant at a banking level, and individuals need to observe ATO rules to ensure their personal...

Im not sure whether Ive ever seen a lender go to the ATO for a ruling on its products...aside from the old CitiBank LOC days..... As an aside... just FYI- Firstmac doesnt take out LMI anymore, below 80%.

sorry Rolf....with all due respect, thats pedantic and just not necessary. This product has been around with Firstmac and sold through many mortgage managers for 5 or 6 years.... Ratebusters, Assured, Mortgage Ezy, Mortgage House etc, have sold it in bucketloads. Its primarily sold to...

They call it a redraw offset account rather than an offset account, because an offset account is a transactional bank account, and APRA only allows ADI's - authorsied deposit taking institutions, to provide bank accounts for customers. Non ADI's are not allowed to establish bank accounts for...

Richard- that product was a 1 year fixed rate with 100% Offset and unlimited repayments, and reverted to their SVR after a year, which is lower than all the banks SVR's. People who took it at 2.99% will be pretty happy now I reckon. I like firstmacs products. They are all either LOC or offsets...