Humble offset account saves 2 years and $35,000

The humble offset account runs alongside a home loan and gives you a dollar-for-dollar reduction on your debt for any money held in it. So if you have a $300,000 loan and $10,000 in an offset account, you'll pay interest only on $290,000.

It's an effective return equal to your mortgage interest rate, higher than the best available savings rates. What's more, as you save instead of earn the money, you'll pay no tax on it.

In one example loan, holding $10,000 in an offset after year one will save you an extra $35,000 in interest and cut nearly two years off the life of your loan.

Keep any money you have – for school fees, holidays or anything – in one of these. Think about getting your salary paid into it too.

Source: The Age