Originally Posted by
KW
I do not like offset accounts at all. They are designed to trap people into constantly drawing down their mortgage equity, ensuring that the mortgage never gets paid off. It is far too easy to say "we need a new tv/car/holiday/etc lets buy one on the offset account". And banks usually charge a higher rate of interest as well, making it even more expensive in the long run.
Are you disciplined enough to ensure that you NEVER draw down more per month than what the balance would have been under a normal mortgage? Are you financially astute enough to even be able to track what the normal mortgage balance would be month by month in order to ensure that you havent drawn down more?
$300,000 mortgage, $10,000 monthly income. Interest payable on $290,000.
However, spend $10,000 every month, then you pay interest on $290,000 FOREVER!
Which keeps the banks VERY happy!