Ask Finder: Can I get a mortgage offset account in my business’s name?
Business mortgages with offset accounts do exist. The tricky part is understanding how it affects your tax.
I am looking at refinancing a home loan that is in a business name. I do not draw a salary from this business. Do you know of any bank that will allow me to have an offset account attached to the loan in the business name?
Dear Offset Entrepreneur,
Thanks for your question. Yes, there are banks that offer offset accounts on home loans in a company name. These will generally be specific business loan offset accounts. Among the major banks, both ANZ and Westpac offer 100% offset accounts on business loans.
However, you may run into some sticky tax issues if your home loan is in your name and you try parking business funds in it. While offset accounts don't draw interest, and therefore don't produce earnings you'd have to claim on your taxes, as a company director you have to account for the funds you move from a business account to a personal account.
The ATO is pretty vigilant when it comes to companies structuring their funds to gain a financial advantage. If you've moved company funds into a personal home loan, it will have to be in payment for some good or service, or a loan at market rates.
Before you think about using company funds to offset the interest on your personal home loan, make sure you speak to your accountant or tax specialist. The interest you save by using an offset account won't be worth much if you run afoul of the ATO.
Hope this helps!
Ask Finder is a regular column where Finder's expert writers answer your questions. All rates and fees are correct at time of publication and we only give general advice.
Do you have a question? Reach out in the comments or speak to someone from our 24/7 customer service team.
- The best standing desk in Australia: Our top choice of the year
- Fast NBN plans are now cheaper. Is it worth switching?
- Save $1,583 a year by using index funds instead of active trading | Dollar Saver tip #60
- RBA offers Christmas relief as it holds cash rate
- 5 perks you can score by upgrading your internet this year