How an Offset Account Can Save You Thousands on Your Home Loan
Making Your Savings Work Harder
With rising living costs, many homeowners are looking for ways to maximize their savings while managing their mortgage.
📌 Enter the offset account—a powerful tool that can reduce loan interest and help pay off your home faster.
What Is an Offset Account & How Does It Work?
A Smarter Way to Reduce Mortgage Interest
An offset account is a cash account linked to your home loan, where the balance is deducted from your loan total before interest is calculated.
📌 Example:
🏠 Home loan balance: $615,000
💰 Offset account balance: $20,000
💡 Interest is charged on: $595,000 (not the full $615,000)
✅ The more money in your offset account, the less interest you pay.
✅ More of your monthly repayments go toward paying down the principal.
🔎 Want to understand offset accounts better? Read more at Moneysmart.
Why Are Offset Accounts Growing in Popularity?
High Interest Rates Make Offset Accounts More Valuable
Offset accounts are gaining traction, with balances increasing to 11% of credit limits, the highest level since APRA began tracking data in 2019.
📌 Why offsets are appealing now:
🔹 No tax impact, unlike savings accounts that incur tax on interest earned.
🔹 Mortgage rates are higher than savings interest rates, making offset accounts a better deal.
🔹 Some lenders allow multiple offset accounts, providing greater financial flexibility.
What to Consider Before Opening an Offset Account
Is It the Right Choice for Your Financial Goals?
While offset accounts offer major benefits, they may not be ideal for every borrower.
✅ Consider these factors:
🔹 Could your money be invested elsewhere for better returns?
🔹 Are you paying a competitive home loan rate, or higher fees for offset benefits?
🔹 Offset accounts don’t usually work with fixed-rate loans—but splitting a loan (part fixed, part variable) may offer a solution.
📌 Want to compare home loans with offset options? Visit our blog on different types of home loan here or why offset accounts are so popular blog here
Get Expert Home Loan Advice Today
Speak to a Mortgage Broker Before Making a Decision
At CBM Mortgages, we help borrowers:
✅ Compare offset account options across multiple lenders
✅ Find competitive home loan rates with the best features
✅ Structure loans to maximize financial benefits
📞 Contact CBM Mortgages today to see if an offset account is the right move for you!
If you are you looking for a Randwick Mortgage Broker click here
Disclaimer
This article provides general information only and does not constitute financial advice. Always consult a qualified financial advisor or mortgage broker to assess your personal situation before making any financial decisions.
Written by Craig McDonald 14/06/2025
