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4 ways to get more out of your offset account


One of the most effective ways to pay off your mortgage as quickly and efficiently as possible is to use an offset account to counteract the full balance.

So how does it work?

An offset account is an everyday banking or savings account that’s linked to your mortgage.  The money in this account essentially ‘offsets’ the balance of your home loan and is calculated daily, reducing the amount of interest you pay every month.  The more money you have in your offset account, the less interest you’ll pay – allowing you to pay off your mortgage faster.

Over time, this method can potentially save you tens of thousands of dollars (or more!), making an offset account a smart idea. Here’s how to get the most out of yours.

1.  Get paid straight into your offset account

One of the easiest ways to keep your offset account topped up is to get your salary deposited straight into the account.  As interest is calculated daily, every little bit counts. Look for an option with a debit card and online payments so you can pay your bills as they come up, while reducing interest at the same time.

2. Pile all your saving into your offset account

We can’t say this enough: the more money you have in your offset account the better, so if you’re lucky enough to come into a big lump sum or have a regular savings schedule, the most efficient place to put it could be your offset account.

Confused about whether to put your money in a term deposit or your offset?  We recommend pooling everything into one account – your offset – because the interest you’ll save in an offset is often more than the interest you’ll earn in a term deposit after you pay tax.

3. Use your credit card to maximise your interest savings

For the uber-discipled, using your credit card (and its interest free period) to pay for everyday expenses is a clever loophole that allows you to really get the most out of your offset account.

You see, the longer you keep your money in your offset account the better, so using the 30 day interest-free period most credit cards offer allows you to get a whole extra month of interest reduction in your offset account – because every day counts!

But here’s the rub: you must pay off the full balance on the day it’s due to avoid paying interest on your credit card balance. Even leaving $1 on your card will see you pay interest daily, so be on top of your billing dates and keep your spending in check.

4. Choose the right option for you

It’s no surprise that financial advisors always recommend shopping around when it comes to financial products as the fees vary greatly. Often you’ll pay an additional fee for a loan with an offset account attached, or you may end up paying a higher interest rate on your mortgage.

In order to get the best option for you, it’s important you shop around and look for the best value loan, as the benefit will depend on how much interest you pay as well as your fees.  You also need to keep in mind whether you have the funds available to sit in an offset account, because if you’re not going to use it, it might not be worth the additional investment.


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Our response to limit the spread of COVID-19

  • As COVID-19 continues to spread, we would like to take a moment to let you know what Financial Spectrum is doing to respond.

    While we haven’t been directly affected with any confirmed cases, we are taking all reasonable precautions to remain safe.Our priorities are:

    1. Keep our staff and clients safe
    2. Stay fully operational in our service delivery and continuing to manage your financial affairs
    3. Play our part in minimising the impact on our community against the spread of COVID-19

    Financial Spectrum has the technology, infrastructure and systems to continue business as usual remotely and our staff will now be working from home.

  • You should notice no change to our service, with the exception that we are encouraging our clients to meet via video call, rather than face to face, unless requested. We will be contacting all clients with meetings booked over the next two weeks with instructions for a video call.This is an evolving situation and we will continue to monitor developments. We will keep you informed of any material changes to our approach.

    These are unprecedented times and we understand that many of you will be feeling unsettled about your finances. We would like to assure you that we are open for business and are here to help you. If you don’t have a meeting booked but would like one, or if you have questions, please contact us at info@financialspectrum.com.au or on
    02 8238 0888

Brenton Tong

Managing Director

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