Offset Accounts

I feel like a goose just finding out the differences between Offset accounts and Redraw accounts. I have been investing for about 3 years now.

I recently funded a boat purchase using money I had stashed in the Redraw account that I use with an IP loan, which has now delivered me some interesting Tax problems.

My accountant has now advised me how the setup should look, using an Offset account for rents to be paid into, and payments to come out of. If only I had bought my copy of API magazine a week ago, it would have shed a lot of light on the difference between the two types of accounts.

With the possibility of using a different lender for my next purchase, given the current state of IR rises (I'm with Westpac).

Can anyone tell me, is there a cost involved in having repayments come out of a Westpac Offset account and paid to say a NAB loan.??

Hi pango,

At least you know now. I didn't know much about Offset Accounts when I started either.;)

You will not be charged for payments going in and coming out of the Offset Account.

I assume you have contacted the bank to find out if the product you have has an Offset Account available? If it's the Premier Advantage Package, you will be fine. :)

Regards JO
Yes, I do have the Premier Advantage Package.

I think I get .6 or .7 discount at the moment too. I have read on some posts that some people are getting much better than that.

Anyone tell me what criteria you must meet to increase the discount??

If you have the loan already , you could ring your lender and ask for a discount.

If you are re-negotiating your loan or doing a new loan, get your mortgage broker to make sure they have asked the question.
Hiya L&P

Dont so much get focussed on the % off.....

whats the actual rate you are paying right now pls ?

I suspect you are on a fixed rate ?

Wow we are only geting .2 % discount. I didn't realise that it varied from person to person - how interesting.:(

Hi L and P,

It doesn't generally vary from person to person. 9-10 times it depends on the product you have and HOW MUCH you have borrowed.

There are bench marks.

Regards, JO