Should I pay down my mortgage or use an offset account?
Once every six months or so, my husband brings up paying off a chunk of our mortgage in a lump sum and I argue in favour of the offset account. The discussion that ensues is a well-rehearsed dance:
Me: “But if we pay off a lump sum, if we need that cash we’ll have to redraw, and maybe the bank won’t let us.”
Hubby: “But if we pay it down, we can drop our mortgage repayments.”
Me: “What’s the point in that? You’ll be charged the same amount of interest either way.”
Hubby: “How can that be? Surely I’ll be charged less interest if I pay it off?”
