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Home Mortgage Offset Account
Assalamoalaikum brothers,
I have asked a bank in Australia about ‘Home mortgage offset account’ and they have replied below quoted within inverted comms.
“In a technical sense, an offset account does not pay interest. Instead, it prevents you from paying extra interest on a home loan. An interest-bearing account is similar to a savings account in that it calculates interest based on the amount in your account up to a certain limit; it usually has much lower rates on average than the home loan rates; and it requires you to pay tax on any interest earned because it is considered income. While you may only receive a small amount of interest in a savings account, the money works considerably harder in an offset facility, saving you thousands of dollars rather than earning a moderate amount of interest as you would in a bank.”
What is Javaid sahab’s opinion on it? In absence of his direction, is there any brother who has knowledge on this matter – can shed light on it please?
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6 Replies
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Home Mortgage Offset Account
updated 2 weeks, 4 days ago
2 Members
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6
Replies
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I have already expressed my understanding here:
Discussion 69503 • Reply 69784
Discussion 69503 • Reply 70283
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Permissibility Of Offset Mortgage - Ask Ghamidi
Assalamoalaikum Brothers,I have listened to Ustaaz Javaid Ahmad Ghamidi Sb 23 Eteraz Series on “Sood”.Is there anywhere Javaid sb explained whether
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JazakAllah brother Umer,
Yes I remember that detailed enlightening discussion with you few years ago and even after my latest discussion with Australian bank that I quoted above I am still stuck at the same point i.e., Whether to take caution or use this offset facility to save money on mortgage. However, as more I dig into banking business more it seems that majority of what I am getting back from them has primarily RIBA in it but then house Mortgage business / other business investments are not RIBA therefore it is that argument that Javaid Sahab has mentioned in his clip one can make.
I think you have given a clear answer from your point of view and I can also see Javaid Sahab has given very clear stand point in attached clips.
Thank you so much.
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You can also register for the next Ask Ghamidi Live Session and ask this question directly to Ghamidi Sahab:
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Ask Ghamidi Live May 25, 2025 – Weekly Online Q&A With Javed Ahmed Ghamidi - Ask Ghamidi
The next Ask Ghamidi Live web conference with Javed Ahmed Ghamidi is scheduled for Sunday May 25, 2025 12:50 PM to 1:20 PM Central Time (U.S.). Please
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Jee – Inshaa Allah I will register and will try to attend. Thank you.
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Assalamoalaikum Brother Umer and Brother Hassan,
JazakAllah for giving me the opportunity to ask this question directly from Javaid Sahab on 15th June episode.
Alhamdulillah, I have received answer directly from him and his answer is aligned with Brother Umer’s thought process on offset account being permissible.
It was my shortcoming in understanding the root of the issue and my argument was invalid which is now clarified Alhamdulillah.
Javaid Sahab answer is available on below video – it’s first question (sharing in case someone else is interested).
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