The mortgage offset account is simply a transaction account that allows you to use any money you have to reduce the interest paid on your home or investment loan. It acts as a normal transaction account but is linked to your home loan and instead of earning interest on your savings, you save interest on your borrowings.

A loan offset works well for members who have wages paid into the offset account and live off a credit card with an effective interest-free period. At the end of the month you draw back funds from the offset account to pay off the credit card.

This facility also works well for those who have a sum of money to “park” in their offset account. It allows you complete unrestricted access to funds in the offset account while minimising the interest component on your home loan which is calculated daily by BCU.

It works to reduce your mortgage faster because despite a lower interest calculation on your borrowings when funds are held in the offset account, you still pay the scheduled repayment.

The Offset savings account can only be linked to one loan account.

Here’s how it works:

Another way of looking at this is you are effectively earning your home loan rate (6.8% in our example) on your savings. Try getting that on a deposit account! Better still, because you are saving interest rather than BCU paying you credit interest, it’s tax free!

A loan offset is not available on some BCU accounts (eg Single Payment Facilities, Fixed rate loans). BCU reserves the right to terminate the offset arrangements with 30-days notice.

For more information or to find out if you are eligible for these facilities ask at any BCU branch or call 1300 228 228.

Products issued by Bananacoast Community Credit Union Ltd ABN 50 087 649 750 AFL 241077.
Available to approved applicants only. Normal lending criteria, terms and conditions apply. Interest rates, fees and charges are payable and are subject to change without notice. Terms and Conditions for Savings and Terms Deposits Accounts are available upon request from any branch or by logging onto www.bcu.com.au. Fees and Charges may apply. Minimum redraw $500. No redraw or offset during fixed-rate period. Redraw not available on interest-only loans during the interest-only period.