Newbie Help - Offset Account

Hi All,

Relatively new poster here, been lurking for awhile though as do most in the "Where to Buy" sub forum :p.
:
Questions:
- Should we be dumping our salaries directly into the offset account rather than paying our mortgage at the start of the month and then as we build up a buffer in our own daily transaction accounts depositing extra?
- We currently pay for bills in turns (e.g. my girlfriend will find a fare split between the bills and pay these out of our normal everyday accounts, should this be done via our offset account?
- Should we be putting our salaries directly into the offset account? and using the offset account for daily transactions such as paying for lunch, weekly groceries and other items?
- Should we as an alternative measure, be using a credit card and just making sure we are paying it on time to keep the money in our offset account for longer? (Note, neither of us have ever had a credit card nor required one with the functionality of debit cards)

We do plan to eventually purchase an IP (realistic goal would be within 18 months) - We are planning to do a bit of travelling within the next 6 months before we knuckle down and purchase an IP.

Thanks in advance,
Trqx - SS newbie.
 
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All I would suggest is crediting your salaries into your offset account (rather than your mortgage) and change the repayments to interest only to build up your savings rather than losing it into the property's equity. The rest sounds fine.
 
Questions:
- Should we be dumping our salaries directly into the offset account rather than paying our mortgage at the start of the month and then as we build up a buffer in our own daily transaction accounts depositing extra?
- We currently pay for bills in turns (e.g. my girlfriend will find a fare split between the bills and pay these out of our normal everyday accounts, should this be done via our offset account?
- Should we be putting our salaries directly into the offset account? and using the offset account for daily transactions such as paying for lunch, weekly groceries and other items?
- Should we as an alternative measure, be using a credit card and just making sure we are paying it on time to keep the money in our offset account for longer? (Note, neither of us have ever had a credit card nor required one with the functionality of debit cards)

We do plan to eventually purchase an IP (realistic goal would be within 18 months) - We are planning to do a bit of travelling within the next 6 months before we knuckle down and purchase an IP.

Thanks in advance,
Trqx - SS newbie.

-Yes. This allows more flexibility in the future if some emergency comes up or some amazing investment deal. Also allows for better tax treatment if your home becomes an IP one day.

- Yes. Since thats where all your money should be.

- Yes, the more in there the more interest you save.

- Depends. Do you have any other non deductible debts at the moment (other than mortgage obviously)? If not, then a credit card to handle your bills can be beneficial as long as you can stay on task to paying it off in full every single time.
 
Hi Aaron, thanks for the reply.
I may have been unclear but we aren't crediting our salaries into our mortgage account, rather we have our own individual everyday savings/transaction accounts which we use lump sum pay into our offset accounts once per month (we both get paid monthly so this suits us well).
Will speak to the missus tonight and see if she too is keen to change our mortgage to interest only.
 
- Depends. Do you have any other non deductible debts at the moment (other than mortgage obviously)? If not, then a credit card to handle your bills can be beneficial as long as you can stay on task to paying it off in full every single time.
Hi Dtraeger,
No we have no other debts.
Am I going over-board now to ask for advice on which credit cards people recommend for everyday use?
Thanks,
Trqx
 
Hi Dtraeger,
No we have no other debts.
Am I going over-board now to ask for advice on which credit cards people recommend for everyday use?
Thanks,
Trqx

Doesnt really matter, but I'd get one with the lowest annual fee you can find to get the most benefit. Interest rate on it won't matter if you're clearing it every month.
 
Depending on your bank could be possible to get two offsets linked to your PPOR mortgage if you wanted to keep you affairs (financial) separate.
 
All I would suggest is crediting your salaries into your offset account (rather than your mortgage) and change the repayments to interest only to build up your savings rather than losing it into the property's equity. The rest sounds fine.

Yep - this approach usually works well.

If you're not disciplined with money though - you might find P&I to be a better option because the principle repayments are like a forced way of saving.

Cheers

Jamie
 
..speaking of offset accounts

I received a letter today from my bank:
---
"Dear Mr .....,

We've identified that your offset and loan accounts have not been properly linked for the period specified in the Schedule A (overleaf). While we have now fixed the issue, we'd like to apologise for the error...

Your account .... was credited with a refund of $... on ...."

The mistake occurred in 2012. LOL :rolleyes: Lunatics running the asylum :(
---
Regarding your original query - most people credit their salaries to a linked offset account.

Personally I try to use the credit card as my first option for daily expenses & pay it on time, which works well. Everyone has already said it, just be prudent with the C-Card payments.
 
I received a letter today from my bank:
---
"Dear Mr .....,

We've identified that your offset and loan accounts have not been properly linked for the period specified in the Schedule A (overleaf). While we have now fixed the issue, we'd like to apologise for the error...

Your account .... was credited with a refund of $... on ...."

The mistake occurred in 2012. LOL :rolleyes: Lunatics running the asylum :(
---
Regarding your original query - most people credit their salaries to a linked offset account.

Personally I try to use the credit card as my first option for daily expenses & pay it on time, which works well. Everyone has already said it, just be prudent with the C-Card payments.


How big was the mistake?
 
Hi All,

Relatively new poster here, been lurking for awhile though as do most in the "Where to Buy" sub forum :p.
:
Questions:
- Should we be dumping our salaries directly into the offset account rather than paying our mortgage at the start of the month and then as we build up a buffer in our own daily transaction accounts depositing extra?
- We currently pay for bills in turns (e.g. my girlfriend will find a fare split between the bills and pay these out of our normal everyday accounts, should this be done via our offset account?
- Should we be putting our salaries directly into the offset account? and using the offset account for daily transactions such as paying for lunch, weekly groceries and other items?
- Should we as an alternative measure, be using a credit card and just making sure we are paying it on time to keep the money in our offset account for longer? (Note, neither of us have ever had a credit card nor required one with the functionality of debit cards)

We do plan to eventually purchase an IP (realistic goal would be within 18 months) - We are planning to do a bit of travelling within the next 6 months before we knuckle down and purchase an IP.

Thanks in advance,
Trqx - SS newbie.

There is no reason to have a transaction account (unless fees on offset??). Just pump all your income into the offset account and keep it there as long as possible. Using a credit card can help keeping your cash in the account longer.
 
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