Offset mortgage

Okay Kiddo, imagine you want to save money to buy a toy. Instead of keeping your money in a piggy bank or spending it on other things, your parents suggest you keep your money in a special type of bank account called an offset mortgage.

An offset mortgage works like a regular mortgage, which is a loan you get to buy a house. But with an offset mortgage, the money you put in the special account is used to reduce how much interest you have to pay on the mortgage loan. Basically, the more money you have in this account, the less interest you have to pay on your loan.

Let's say your mortgage loan is for $100,000, and you have $10,000 in your offset account. The interest you have to pay on your loan will only be calculated on the remaining $90,000 instead of the full $100,000. This means you save money on interest payments.

But here's where it gets even better: you can still take out the money you've put into the offset account anytime you want, so you won't lose access to your savings. And since you're not paying as much interest, you'll have to pay off your mortgage faster, which means you can save even more money.

So, in summary, an offset mortgage is like a special type of bank account that helps you save money on your mortgage loan. The more money you put in the account, the less interest you have to pay on the loan. Plus, you can still take out your savings anytime you want. All in all, it's a smart way to save money while paying off your home at the same time!