Offset Account only Linked to 1 IP

[HomeBuyAU]

I have just realized after speaking to ANZ that only one of my properties (the one worth the least) is linked to my offset account and I was led to believe all along that they both are. They said it would not make any difference if the one worth more was the one linked but I asked to have it changed anyway to link to that one.

I might have to consider moving my finance to another bank, I had a fair bit of savings this month in my offset account but it was disappointing to see it made no difference on my payment.

 

[rugrat]

Of course it makes at difference which one it is linked too. If it is attached to the larger loan, then interest owed (and the potiental interest saved) would be more. Or am I missing something???

 

[mrsdawnrazor]

The bank is right - you have $x debt - doesn't matter how it is held, you have $x offset, therefore you are reducing the interest you are paying by the amount in the offset account.

For example
IP1 = $200k debt
IP2 = $400k debt
Offset = $100k
You will either be paying interest on $100k for IP 1 or $300k for IP 2, either way you will be paying interest on $500k ($600k debt minus $100k offset)

If your interest rates are the same on both loans, which debt you are offsetting wont make a jot of difference

 

[vbplease]

If you find a bank that lets you offset multiple loans i.e. $1 offsets $10, let me know.. that would be awesome

 

[Peter_Tersteeg]

Sorry, what were you guys expecting? An offset account is essentially a savings account which is linked to a single loan account. If you want to offset a second loan, you need a second offset account.

The size of the loan makes no difference to how large the savings is. It's the amount of money in the offset account that counts.

 

[Rolf Latham]

Hiya

I think this is more about

200 k in the offset, and 180 on the loan type thing perhaps, where the loan overflows the offset

With ANZ that can only be fixed with a second offset acct


ta
rolf

 

[softmonkey]

OP, you only need to have them link it to the other loan if (a) your savings exceeds (or soon will exceed) the linked loan, or (b) the other loan is at a higher interest rate. Otherwise it will make no difference.

Note also that some offset accounts require a minimum balance before they kick in. ANZ's previous "Home Loan Interest Saver" offset accounts had a $2000 minimum. However their new "ANZ One" offsets have no minimum.

 

[HomeBuyAU]

thanks for the info everyone, yes I have now linked the higher loan but it won't make any difference for now as I don't have much savings in the account (just under 10k), most definitely not more than the property value. it's good to know these points for the future if I do have a lot more money in the account.

 

[alexlee]

I might have to consider moving my finance to another bank, I had a fair bit of savings this month in my offset account but it was disappointing to see it made no difference on my payment.

thanks for the info everyone, yes I have now linked the higher loan but it won't make any difference for now as I don't have much savings in the account (just under 10k), most definitely not more than the property value. it's good to know these points for the future if I do have a lot more money in the account.

10k would be a decrease of maybe $60 of interest a month. Why are you disappointed? What exactly did you expect?

 

[Thrawn]

Don't forge the tax deductability of the loan as well.

You don't want to offset a loan thats tax deductible when you have another one that isn't !!

 

[Mick C]

Don't forge the tax deductability of the loan as well.

You don't want to offset a loan thats tax deductible when you have another one that isn't !!

This is probably the most important point..Offset the PPOR and not the IP

Regards
Michael

 

[HomeBuyAU]

Don't forge the tax deductability of the loan as well.

You don't want to offset a loan thats tax deductible when you have another one that isn't !!

Good point but they are both IP's!

 

[Mick C]

In that case...it makes no diff
But it would have still been good to know the set up was done to your "liking" since you ARE the customer and you are the one PAYING!


Regards
Michael

 

[HomeBuyAU]

In that case...it makes no diff
But it would have still been good to know the set up was done to your "liking" since you ARE the customer and you are the one PAYING!


Regards
Michael

yes well in fact the lower cost one, the one that was linked was actually a PPOR but probably for only a month or two until I moved out. It's annoying to think the bank or my ex broker had not arranged all this and discussed it with me to choose the offset account property. It was lucky I called today and the knowledge is very valuable from what everyone has posted, especially when I purchase more properties and a PPOR in the future.