Offset Account (Pro Version Only)

An offset account is an account designed to reduce the amount of interest you are charged on your loan or mortgage, by reducing your loan balance before the interest is calculated.

For example, if you have a loan with a value of -100,000, and an offset account with a value of 5,000, then your interest payable would be calculated on -95,000.

If your lender has provided you with an offset account for your loan, then the following steps will show you how to set it up.

 

Link the Accounts

You need to set up two separate accounts, one for your loan and one for your offset account. We recommend that you use the word Offset in the title of the offset account. For example, if your loan account is named "Home Mortgage", then we recommend you call the offset account "Home Mortgage Offset".

The loan account is set up in the normal way.

To set up the offset account, the following must be done via the Edit account option:

  1. Select the Offset Account field
  2. Enter the allowable offset amount (this is the amount of the balance that can be used in the interest calculations, and is normally set to 100%).
  3. Select the Loan for this Offset Account from the list of accounts.

 

Statements and Transactions

All statements and transactions for the offset account are entered separately from the loan account. You need to create new statements for the offset account and add all the required transactions (or import them).

 

Interest Rates

The interest rates for the offset account and the loan account are maintained separately. If your offset account has the same interest rates as your loan, use the Copy Rates options from the Interest Rates view for the offset account.

 

Reporting

Most of the reports are designed to be run against the loan account, not the offset account. That is, you should select the loan account before running the required report.

The Interest Checker Report will automatically include the balance of the offset account when it calculates the Estimated Interest Paid for your loan. To see the details of the offset account interest you are saving, select the Offset Account tab in the report.

The Refund Calculator Report will automatically include the balance of the offset account when it calculates the Estimated Error and Total Refund for your loan.

The Daily Interest Report provides a detailed breakdown of the loan account and offset account information, including the balances, daily interest rates, interest on each account, the allowable offset amount and the total interest that should have been charged per day.