Paying off your home loans could go hand-in-hand with putting away savings for a rainy day.

Life delivers curve balls. Whether it’s the car breaking down, the washing machine refusing to work or the arrival of an unexpectedly large bill, at one time or another, most of us need access to emergency cash.

Of course, with so many households looking to pay off their home loans as quickly as possible, it can be difficult to build up those ‘rainy day’ funds.

One-in-two households have less than $5,000 in rainy day savings  

An alarming number of Australians simply don’t have the financial resources to deal with unforseen emergencies. The June 2014 ME Bank Household Financial Comfort Report found almost one-in-four (24%) Australian households don’t think they could raise $3,000 in an emergency. Almost half (49%) have less than $5,000 in emergency savings.

Shifting the focus from debts to savings

Part of the challenge is that many Australians are focused on paying down debt rather than building savings: 34% of households with savings surveyed said they are paying off debts as fast as they can, with only 26% building up ‘rainy day’ savings.

There is a way to have the best of both worlds – growing a pool of emergency cash that also helps to pay off the home loan.

The ultimate solution

ME Bank’s Ultimate Offset Account* combines a home loan and a linked transaction facility. Instead of receiving interest on the balance of the linked account, the home loan interest is based on the balance of the home loan minus the amount in the transaction facility.

That means that if you have a loan of $300,000, and the transaction facility has a balance of $10,000, loan interest is calculated as if the loan balance is $290,000.

It means more of your savings go towards paying off the loan, and the funds can be accessed any time the money is needed.

Have your cake and eat it too

The bottom line is that ME Bank’s Ultimate Offset Account is a simple, very effective way to grow emergency cash, while staying on track to pay off a mortgage sooner.

To find out how an Ultimate Offset Account could be a source of emergency cash for you, speak with ME Bank. Our mobile bankers will come to you at your convenience – book online today at or call us on 13 15 63.

* Fees and charges apply. Terms and conditions available upon request. Applications are subject to credit approval. Members Equity Bank Limited ABN 56 070 887 679 Australian Credit Licence Number 229500

 Offset applies only to one linked variable interest rate portion of a split loan.

Date Published: 01/09/2014 Category: Member Benefits

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