What is an offset account?

Basically it is an account linked to your home loan whereby if you have say a $100,000 loan on a property, you get your fortnightly pay put into it. You also have a credit card that you use for EVERYTHING. You get a 60 day interest free period on the card so as long as you pay it off when required, you get to use the 60 days of wages or approximately $8,000 off the principal. Ie you will be charged interest in that final week on $92,000 not $100,000.

Loan $100,000
Interest at 7% from day one $134 a week
Week 1 principal $100,000 (less $1000 wages in offset account)
Interest reduced to $133 a week.

Not much there but by week 8 at the end of your interest free period:

Week 8 principal $100,000 (less $8,000 wages in offset account)
Interest reduced to $123 a week ($10 saving)

It only works if you pay of the credit card before the interest kicks in.

“Life is not a journey to the grave with the intention of arriving safely in a handsome and well preserved body, but better to skid in sideways, thoroughly used, totally worn out and loudly proclaiming . …… Hell, what a trip !!”