Should I leave a small balance on my mortgage?
It might be crazy to think that some people leave a small balance on their mortgage. However, not everybody can immediately pay off a mortgage or wants to because there are benefits to leaving a small amount. For example, if you choose you can access and create an offset account that is directly connected to your mortgage. This is where your payments will occur. You can also use your offset account to increase the money you have to pay a loan in advance.
As stated previously, there are many benefits to leaving a small balance on a mortgage. However, keep in mind that the small balance should be manageable at about 500 to $1,000 or less. Some people also keep up to 30,000 as a small amount as long as they are able to. The good thing about keeping a small balance on your mortgage and having an offset account is the money in your offset account is your money.
An offset account is not like a repayment on a loan because repayments are not your money and you lose it entirely when you pay it. Only leave a small balance on your account if you are looking to pay for other things and save money or keep your account open because you want a higher credit score.
Small Balance on Mortgage Conclusion
Overall leaving a small balance on your mortgage it’s not for everyone and you should consider your options. If you are unsure of how this will affect you, speak with a mortgage house lender as they have lots of expertise and knowledge on this topic.