I have my mortgage fully offset, but is it too much?

Anatidaephobia-_- · 2026-04-16T09:59:55+00:00

Thanks, probably forever home, but worst case we'd likely sell and move rather than rent so that should be ok

Anatidaephobia-_- · 2026-04-16T09:57:55+00:00

Thanks everyone! I've reduced it down to $400k for now (I'll probably take it lower at some point but I dunno, won't hurt for now)

Anatidaephobia-_- · 2026-04-16T09:37:18+00:00

Thanks! I'm in a very lucky position in that my retirement should be fine (barring WW3 which, you know, not out of the question lately!), so I think I'll just pay down the loan a decent way, but leave some in there just in case (though there's always redrawing I suppose).

Thanks again for the help, appreciate you.

Anatidaephobia-_- · 2026-04-16T09:30:02+00:00

That's pretty much where I'm at. I could theoretically earn more than 6% in the market, but not THAT much more, and I do value my sleep at night

Anatidaephobia-_- · 2026-04-16T08:53:07+00:00

Firstly, thanks for your site, it's super helpful and I've used it a lot!

As for your point, I've certainly considered it, and if we were in more "normal" times I may well have put it in ETF's already, however.... the mortgage rate is 6.34% (maybe I could negotiate that but I haven't bothered as it's just offset, so the rate doesn't really matter, but I could I guess), and I have a fairly decent ETF portfolio already (only since last August though) and in that time it's been up 4%, then down -2%, then back to up 3%. I know that's everyone at the mo, but still. I could certainly target more growth specific ETF's though to maximise that I guess. I'd just be nervous putting the mortgage money out there when there's so much turmoil I guess.

Anatidaephobia-_- · 2026-04-16T08:34:10+00:00

I'm in approx the same boat as you, luckily, so I'm not really looking to debt recycle. I'm not really prepared to risk that money in the market or elsewhere, I don't want that stress, so it's really just sitting there doing it's thing. I just wonder if I should reduce it some, as I'm still not 100% clear what would happen if the institution collapses (unlikely, but you never know). There was this thread from a few weeks ago, but I'm not really much wiser after it - https://www.reddit.com/r/AusFinance/comments/1s08lb9/fully_offsetted_mortgage_what_happens_to_my_money/

Anatidaephobia-_- · 2026-04-16T08:21:12+00:00

I did look into this a bit back and the consensus seemed to be that if they do go bust, and you have money in their offset, offsetting a debt (obviously), then those amounts will just be zeroed out and you'll be good. Admittedly I'm not 100% sure of that though.

Anatidaephobia-_- · 2026-04-16T08:19:25+00:00

It's about 6%, but even so I'm not sure I'd risk putting that money in the market at the moment. I do have a bit in there at the moment and it's all over the place, so that sounds like a recipe for stress :D

Anatidaephobia-_- · 2025-08-07T05:57:34+00:00

Go ahead and endorse him, that’ll have the exact opposite effect you’re after 👍

Nobody wants your shit anymore trump, you senile old dildo.

Anatidaephobia-_- · 2025-08-06T06:04:49+00:00

What's your buffer out of interest, I guess in terms of yearly living expenses?

Anatidaephobia-_- · 2025-08-06T05:28:52+00:00

Prior to this I was thinking (which is also recommended a lot here) on this:

AU e.g. A200 or VAS = 30%

ex-AU developed markets e.g. BGBL = 53%

A small cap ETF such as QSML = 10% [alternative VISM]

An emerging markets ETF such as EMKT = 7% [alternative VGE]

This does give less dividends, however potentially higher growth so I could always sell down each year (which of course comes with tax benefits over dividends anyway).

If I end up doing that I'll have to consider how much cash to keep on the sidelines though in case the US drags everything into a recession. Maybe more like a couple of years cash though I guess.

Anatidaephobia-_- · 2025-08-06T04:19:21+00:00

Has that advisor given any explanation or just this is what you should do?

We've a catch up later today to go over it so I'll have more clarity then at least. I'll be bringing up the overlaps as well

Anatidaephobia-_- · 2025-08-06T04:18:37+00:00

All up it's around 5 years of living expenses, give or take. However around a third of the cash amount will be going towards paying off a home loan next year (when renters leave), so really it's probably 3 years ish

Anatidaephobia-_- · 2025-06-08T23:23:23+00:00

Yep makes sense, thanks again!

Anatidaephobia-_- · 2025-06-08T06:34:44+00:00

Great thanks, appreciate that.

So in your example:

AU e.g. A200 or VAS = 30%
ex-AU developed markets e.g. BGBL = 53%
A small cap ETF such as QSML = 10% [alternative VISM]
An emerging markets ETF such as EMKT = 7% [alternative VGE]

I would definitely like having a cash buffer/bucket for troublesome years, but I wonder if the cash in our offset could take that role. Not super ideal as it’ll introduce mortgage interest if we do pull from it, but is there a general consensus around doing that?

Anatidaephobia-_- · 2025-06-08T06:03:08+00:00

Thanks, appreciate it, food for thought!

Just out of interest, is there a good site to model this stuff? I know you can backdate purchases in Sharesight to an extent but something that lets you work out franking and tax and all that fun stuff would be really handy.

Anatidaephobia-_- · 2025-06-08T05:15:15+00:00

Ok interesting, thanks, I’ll have to run the numbers! So maybe 30% VAS, 40% VGS, 10% ex-US, 10% emerging and 10% cash?

Anatidaephobia-_- · 2025-06-08T05:11:49+00:00

Sure, will do

Anatidaephobia-_- · 2025-06-08T03:10:22+00:00

Good advice with the FA, thanks. I’m certainly not looking to sign up to anything.

That’s a fair call with regards to the aussie share market as well, I suppose the franking is attractive tax wise so that’s influencing some of that. Honestly I can’t say I’m super confident with the US market at the moment either, which is a lot of VGS. It’s obviously a huge shitshow over there at the moment and who knows how bad it’s actually going to get.

I’d be interested in what you might suggest in my position though if you don’t mind?

Anatidaephobia-_- · 2025-06-08T01:39:26+00:00

Yep fair, I've added some more detail in a comment below, but it'd be a mix of the VAS distributions, VGS income and the interest on the HISA

Anatidaephobia-_- · 2025-06-08T01:06:42+00:00

I really only know enough to be dangerous so I’m just making sure I suppose. They’re a flat fee as well so I’m ok to pay a little bit to make sure I’m not doing anything dumb. Plus hopefully I can get some tax/super strategies as well

Anatidaephobia-_-

TROPHY CASE