All Topics / Finance / Interest Saved on Offset account

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  • Profile photo of apprentice2apprentice2
    Participant
    @apprentice2
    Join Date: 2003
    Post Count: 8

    Hi,

    Just want to know, has anyone included Offset Account savings as ‘Earning’ when they apply for a loan? Will financial institution regard this earning?

    Regards,
    Apprentice

    Profile photo of Penfold_2Penfold_2
    Member
    @penfold_2
    Join Date: 2004
    Post Count: 8

    Unfortunately you can not use any offset income/saving for serviceability when applying for a home loan.The reason would be that you can access this money after settlement

    Profile photo of petebellpetebell
    Member
    @petebell
    Join Date: 2004
    Post Count: 38

    Offset savings cant be regarded as earnings, because they aren’t earnings.

    Pete

    Profile photo of apprentice2apprentice2
    Participant
    @apprentice2
    Join Date: 2003
    Post Count: 8

    I think I did not make myself clear…

    But, I’m referring to the interest you saved from your offset account and not the money in your offset account [confused2]. E.g. If you have $100k in a 100% offset acct on your loan with 7.07%, You will save $7070 in a year. Isn’t that $7070 a form of income, that bank just did not pay it to you directly so you do not get taxed?

    Hope that makes it clearer…

    Apprentice

    Profile photo of petebellpetebell
    Member
    @petebell
    Join Date: 2004
    Post Count: 38

    As I said, it is not income.

    My question for you is why would you want to try and use interest earnt (or avoided) on cash in the bank, as extra assessable income in order to borrow more money, wouldnt you be better off to use the cash that you have?

    This makes no sense at all…

    Pete

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I agree with Pete, it is not income and I can’t see any lender regarding it as income. Even if you were receiving interest, it is still unlikely that they will take it into account for serviceability. This is bacause, you could simply take it out of your account at anytime.

    Terryw
    Discover Home Loans
    Mortgage Broker
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 6 posts - 1 through 6 (of 6 total)

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