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Understand the offset account

Saxon's main savings sit in a MyState offset account linked to the home loan. The balance is about $31,000 — check the app for the exact figure today.

This page explains offset in plain language for someone who has never heard the word before.

One-sentence summary

Offset money is savings that reduces mortgage interest, but you can still spend it like a normal bank account.

The problem offset solves

A mortgage is a large loan for the house. The bank charges interest on what you still owe.

Normal savings account money earns a little interest — but mortgage interest is often higher. Saxon kept spare cash in the offset instead of a separate savings account so the mortgage cost less.

How it works (simple picture)

Imagine:

  • Loan owed: a large amount (see MyState app)
  • Offset balance: about $31k

The bank calculates interest roughly like this:

Interest charged on ≈ (loan balance − offset balance)

So every dollar in the offset works like it is paying down the loan for interest purposes — without locking the money away.

You still have a loan

The loan balance number on the statement does not shrink just because offset is full — offset reduces interest, not the printed principal in the same way extra repayments do. Both offset and extra repayments help; Saxon used offset as the main tool for flexible cash.

Mental model — "jar on the shelf"

Jar What it is
Mortgage jar (debt) What Saxon owes on the house
Offset jar (cash) Money Saxon can use anytime
Magic link While cash sits in offset, the bank pretends part of the debt is smaller for interest only

Take money out of offset → interest goes up a little.
Put money in → interest goes down a little.

Why ~$31,000?

Saxon used about $31k as a comfort buffer:

  • Emergency fund (car repair, medical gap, job gap)
  • General savings
  • One place instead of many old accounts (Macquarie splits, old uBank emergency, etc.)

If offset drops below that comfort zone, Saxon paused Vanguard top-ups until it rebuilt. See Monthly money routine.

Offset vs everyday Macquarie

MyState offset Macquarie (maybe)
Purpose Savings + lower home loan interest Older day-to-day spending
Priority Put spare cash here first Float for bills if still in use
Login Log into MyState Search Vaultwarden for Macquarie

What you can do with offset money

Allowed (normal banking):

  • Pay bills via BPAY or transfer
  • Pay the mortgage (see Make a mortgage payment)
  • Move to Vanguard when buffer is healthy
  • Withdraw for genuine needs

Think twice before:

  • Draining offset for non-urgent spending — mortgage interest rises
  • Moving everything to a "higher interest" savings ad without comparing to interest saved on the loan

Step-by-step — check offset today

  1. Open Vaultwarden → MyState login.
  2. Log into MyState.
  3. Tap Accounts → Offset (name may vary).
  4. Read current balance and last 10 transactions.
  5. Compare balance to ~$31k target — above, on track, or below?

Troubleshooting confusion

Question Answer
Is offset the same as the loan account? No — two linked accounts. Loan = debt. Offset = your cash.
Do I pay tax on "interest saved"? Not as income — but tax questions go to an accountant.
Can offset go negative? No — it is a deposit account; minimum zero.
Where are account numbers? Find bank details in Vaultwarden