Offset or Home Loan?

LPotatosaurus on 13/08/2021 - 08:19

I think I have made a huge mistake… I recently split our loan and the variable portion charged interest this month even though the balance is the same amount as the loan. Should the money have been in the offset account instead? I always thought the money could sit in the home loan to reduce the interest charges. Please let me down gently. I realise this may have just cost us $$$ 😢

PS. I have read other posts and still not clear on the answer. If it matters, I have full access to redraw etc without penalty so that is not an issue

Financial Home Loan Loan

closed Comments

  • GoldenDragon888 on 13/08/2021 - 08:21

    Your offset account may be linked to the non-varible (other) portion. Have you checked this?
    Which bank are you with?

  • redfox1200 on 13/08/2021 - 08:47

    what do you mean the balance is the same as the loan? do you mean you have a 100k loan and 100k cash in redraw i.e $0 balance?

    if you have a zero balance the bank might just close out the loan and take all the cash.

    if you have had the money in the loan for less than the full month or cycle you will still be charged for the time it was not offset

  • SF3 on 13/08/2021 - 08:56

    Call your bank, it could be a mistake on their part too. Report back :)

    • Potatosaurus on 13/08/2021 - 09:12
      +2

      Just called Westpac. Was told it doesn't matter if the funds are in the loan or the offset account, it will still reduce the interest in the same way. The interest I did get charged was a small amount from last month before the loan switched/split. PHEW!

      • SF3 on 13/08/2021 - 09:25

        oh good :)

  • Moderatormoocher on 13/08/2021 - 12:41

    Commenting closed as OP has resolved the issue

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