I had an eye-opening conversation with my bank this week. A sort of pre-pre-renovation conversation.
The big thing in Australian homeloans is “100% offset accounts”. What this means is that if you borrow $100,000 but you have $40,000 in deposit funds, your deposits count against your borrowings and you only pay interest on the $60,000 gap. Which is awesome because otherwise you would pay interest on $100k and then earn a little bit of interest on $40k and then pay tax on that leaving only a pittance that is probably not even enough to purchase an Inspection Camera.
This is important because when I get paid, I get paid in lump sums, and then I can go for months without being paid again. (Especially as I am Crap At Invoicing and really need someone to hold my hand to get all that stuff done.) So I have two important bank accounts with varying sums in each:
- One is the 40% of everything I earn that I put aside for taxes, which gets paid to the taxation department in a lump sum
ifwhen I actually get around to doing my tax return.
- And the other is the account where my money sits until I pay myself – because it seems better to average it over the year and pay myself slowly.
(Note: I know that there are other ways I could do this with budget lines and things and all in one physical bank account. But I would prefer not to do that because it just encourages me to fudge the money and buy shoes.)
What I would like to have is a homeloan with TWO (or even three, if Fraser has any spare cash lying around) of these magical 100% offset accounts.
And apparently this cannot be done.
I could, however, split the loan in half and have TWO homeloans, each with its own offset.Or three, if Fraser wants to do this as well.
Because that makes a lot more sense.
If only there were a Free Gift With Every New Homeloan. I could make a killing.