Originally posted by DaveW
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A revolving credit mortgage may start at $50,000 owing and then you pay down to $30,000 owing and have $20,000 "head room" that you could withdraw again later. The bank can close off that $20,000 head room at their whim.
Offset mortgages do not have such a limit. If it starts off at $50,000 owing, and you have $20,000 cash sitting in your offset account, you still owe the bank $50,000 they are only calculating interest on $30,000 of it. To "reduce the limit of your mortgages" as you are suggesting would require them to confiscate the $20,000 cash your have and use it to pay off the mortgage directly. Yes, there's nothing stopping a bank from doing that, however reducing a revolving credit limit (or overdraft limit, or credit card limit) by $20,000 is very different than literally confiscating $20,000 cash. What I'm saying is, for the bank to start raiding your cash deposit in this way, the shit would really have to have hit the fan.
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