Browse Forums Home Finance 1 Feb 09, 2010 10:40 pm Hi all. Let's say I can put an extra $1000 each month into my loan payment. What is the difference between these options and which is better? Option 1: Put the $1K directly into the loan account which has a redraw facility. Option 2: Pay the minimum repayment and put the $1K in an offset account. Thanks. Oxford 22 @ Stage12a Point Cook Site Cut : 05/03/2010 Slab Pour : 24/03/2010 Frame Inspected : 06/04/2010 Pre-plaster Inspection: 22/04/2010 PCI: 16/07/2010 Final Inspection: 30/07/2010 Landscaping: who knows??? MyHomeoneThread Our Oxford22 Blog Re: Money in the offset vs in the loan 2Feb 10, 2010 1:15 am I can't see a diff, maybe fees??? A thankful person is a happy person. [/color]My hobby design blog: http://aviewondesign.blogspot.com/ Re: Money in the offset vs in the loan 3Feb 10, 2010 3:12 am The only potential difference I see is that the redraw facility may have a minimum amount (and maybe a redraw fee). The offset account looks like the safe bet. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Money in the offset vs in the loan 4Feb 10, 2010 7:36 am agree with above, depending on your account there may be a miniumum redraw amount and / or fees to do the redraw. if you have your savings in your offset and you live out of your offset account then all your savings and "living" money are all in one. some people prefer to keep them separate so that they can see that they are not eating into savings. That's going to be a personal preference because everyone is a little different with saving and spending The big difference for me is tax. If you ever think that you may turn your house into an investment property and rent it out, then get the offset. If you put your savings into the loan, when you redraw that later say for the deposit for your next house or even for personal reasons, then the deductibility on the loan is compromised. If you put savings into an offset, you can use that money however you like and you can claim the maximum amount on the investment property. Re: Money in the offset vs in the loan 7Feb 10, 2010 6:16 pm thanks all.. i guess i'll be putting it in the offset then.. Oxford 22 @ Stage12a Point Cook Site Cut : 05/03/2010 Slab Pour : 24/03/2010 Frame Inspected : 06/04/2010 Pre-plaster Inspection: 22/04/2010 PCI: 16/07/2010 Final Inspection: 30/07/2010 Landscaping: who knows??? MyHomeoneThread Our Oxford22 Blog Yes, I had already tried searching those. In the end I am fabricating my own. 4 4175 The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19097 As a tradesmen get a private inspector although I don't think there worth it in their profession themselves the reminder they serve to the tradesmen doing the work is… 3 27360 |