Short, informal explainer (YouTube) by a single speaker describing how an offset account works: savings linked to a home loan reduce the loan principal used to calculate interest (example: £500k loan with £100k savings yields interest on £400k). The speaker highlights that interest saved via an offset is effectively tax-free and invites viewers to message keywords (‘offset’ or ‘hacks’) for more information.
Hey, do you know what an offset account is or are a bit confused? If you are, I don't blame you. There's a lot of rubbish out there. I'll have a go at explaining it this way. The old school way of having a home loan is you have your home loan over here, call it 500 grand and you've got your savings over here. You pay money, you pay a bit more, it goes down. Awesome what an offset account does. It lets you magically link whatever is in your home loan to your savings. Now, silly figures here, just so you get the idea, if you've got a 500 grand home loan and 100 grand in savings, you get some interest. P.S. you pay tax on the interest. Number one, if it's an offset account, you've got 100 grand here. It's as if it was magically linked to the home loan and now you're only paying interest on 400 and the interest you save is tax free. So whatever is in your offset account, it's as if it was in the home loan, potentially saving you thousands and thousands and thousands as tax free savings. If you want to find out more about offsets, just message me offset or hacks if you like and I'll send you some info.
