An offset mortgage is a specific mortgage loan and you can find it, for example, at the domestic Raiffeisenbank. In the case of an offset mortgage, the monthly interest is calculated only on the difference between the outstanding principal of the loan and the balance in a special savings account (note: this account does not bear interest). Thus, only a certain part of the mortgage bears interest and the client pays less in interest as a result. An offset mortgage is sometimes referred to as a savings offset mortgage.
The money in the savings account can be disposed of as needed
In addition to the lower amount paid in interest, another advantage of an offset mortgage is the ability to freely dispose of your own savings. So, for example, if you decide to buy a new car from your own savings, you can use the money in your savings account immediately without any penalties. Another advantage is that the crediting takes place on a daily basis. It is therefore worth putting money in a savings account for several days or weeks.