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When banks and logic don’t entirely mix.

22 May

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 if when 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.

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1 Comment

Posted by on May 22, 2012 in extension, not your earth logic, tax

 

One response to “When banks and logic don’t entirely mix.

  1. dracomjb

    May 22, 2012 at 3:18 pm

    I can’t recall the bank but I’m sure one of Westpac, ANZ, NAB or Bank of Melbourne offer 1 mortgage with multiple offset accounts.

     

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