Mortgage Trick: Use every dollar twice
A magic little Aussie invention called an offset account lets you use every dollar twice. A savings account that runs parallel to your mortgage, it nets off 100 per cent off any money you have in it against your home loan balance. So if you have a $100,000 mortgage and $5000 in an offset, you’ll pay interest only on $95,000.
You might have separate savings for a holiday, for your next car, for kids’ school fees … you should instead be putting every single dollar – which you get to keep – in an offset account. That way you get to use it for its intended purpose and to save dramatic interest.
Let’s assume you have the average mortgage and an average of $10,000 sitting in your offset. You’ll save more than $22,000 in interest, and almost a year and a half.
You could also take this to a higher level by getting your salary/ies paid in and using a credit card for all your expenses, shifting the money out only when your credit card bill is due each month. At which point more salary should go in …
Do you want to see if an Offset account would work for you?
Contact the Boss