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A mortgage offset account becomes a personal transaction account. The balance in the account is used to reduce interest on your mortgage. You can deposit and withdraw on this account the same as other accounts so it could be set up as an account for depositing your salary for instance. Your offset account is linked to your mortgage thereby reducing the balance of your mortgage by the amount of money in your account, dollar for dollar; therefore allowing the balance to reduced the interest payable on your mortgage. Remember the daily limit of your account is offsetting your home loan when


the lender calculates the interest.

It could be used as a Loan Reducer or Mortgage Reduction facility. Different lenders offer different types of Offset features, again you need to shop around to make sure the lenders facilities are in line with your own requirements. Be aware that Mortgage offset is not necessarily always offset 100%.

    Although ATM, Eftpos, cheque and other access means are available, 100% offset loans encourage borrowers to use a credit card for all purchases and then settle the card in one transaction from the mortgage account per month. This allows the money to remain in the account to reduce the interest for the longest possible period of time.
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