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Is it a good time to change to an offset account

Discussion in 'Real Estate' started by johk, 21st Mar, 2009.

  1. johk

    johk Member

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    Location:
    brisbane
    Hi,
    At the moment we have our mortgage locked in with a fixed interest. This term finishes at the end of April. I am considering to change to an Offset account (or Line of Credit).
    The way I see it is due to the interest rates being low you gain more with having an Offset account – is this assumption correct?

    Thanks for any comments

    J
     
  2. jrc77

    jrc77 Well-Known Member

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    I'm not sure what you mean by gaining more from an offset account when interest rates are low.

    To decide if an offset account is advantageous (as compared to a redraw facility) in your situation probably depends on what your intention is with the place that the loan was used to purchase and your intention for purchasing other PPOR's in the future. There is a lot of posts on this site talking about the situations when an offset account should be used.

    Regards,

    Jason
     
  3. Billv

    Billv Getting there

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    You gain more in comparison to what?
    LOC and Offset work in the same way.

    Is this an investment property?
     
  4. Chris C

    Chris C Well-Known Member

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    From a finacnial security perspective I think having access to funds that you have put in your offset account (without tax complications) may come in handy considering we are heading into tough economic times.
     
  5. Billv

    Billv Getting there

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    What touch economic times?
    Stop listening to KRudd and do your own research
     
  6. ashwright

    ashwright Well-Known Member

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    I think the offset account is even more important in good economic times, who knows when that next property (investment or PPOR) will come up?

    It can be handy having the cash sitting in an offset account.


    Bit more on topic, why can't you have a fixed loan with an offset account. (Get the best off both). Even if your bank does not do this, why not fix 2/3 of the loan and have the offset account on the variable portion.
     
  7. Chris C

    Chris C Well-Known Member

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    Very valid point. I guess we can agree that being as liquid as possible without sacrificing too much return is always a good thing...

    :D

    I don't know if you are being serious or sarcastic, but on the off chance you are being serious I'm not even going to dignify the statement with a thought out response.