Offset Home loans

An offset bank account that’s tied to your home loan can help you save money on your mortgage. In short, the more you have in your offset account on any given day, the less interest you’ll be charged for that day.

Keep in mind, an offset account home loan is also versatile. For example, you can use an offset account just like you would a regular bank account by having your salary paid into it, setting up direct debits or using a linked debit card for everyday purchases. Start comparing home loans now!

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offset home loans

Offset home loan comparisons on Mozo - last updated 18 August 2022

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  • Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    variable rate
    comparison rate
    Initial monthly repayment
    3.60% p.a.variable for 24 months and then 4.00% p.a.
    3.96% p.a.

    Already includes July RBA rate increase. New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

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    Details
  • Unloan Variable

    Owner Occupier, Refinance Only

    variable rate
    comparison rate
    Initial monthly repayment
    3.14% p.a.
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

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    Details
  • Offset Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    3.69% p.a.
    3.94% p.a.

    Ability to open up to 10 offset accounts per loan account. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). Apply online in as little as 15 minutes.

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    Details
  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    variable rate
    comparison rate
    Initial monthly repayment
    3.29% p.a.
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

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    Details
  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    3.79% p.a.
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.

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    Details
  • Mozo Expert Choice Badge
    Variable Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    variable rate
    comparison rate
    Initial monthly repayment
    3.34% p.a.
    3.38% p.a.

    Purchase and Refinance. Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, optional 100% offset account. Enjoy a simple online application.

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    Details
  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR <70%

    variable rate
    comparison rate
    Initial monthly repayment
    3.27% p.a.
    3.28% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Receive $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 31 August 2022 and settle by 31 October 2022.

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    Details
  • Mozo Expert Choice Badge
    No Frills Home Loan

    Owner Occupier, Principal & Interest, LVR <70%

    variable rate
    comparison rate
    Initial monthly repayment
    3.49% p.a.
    3.49% p.a.

    The Qudos Bank No Frills Home Loan features a competitively low rate for borrowers who don’t need all the bells and whistles. There are $0 bank fees. Weekly, fortnightly or monthly repayment options. Unlimited extra repayments at no cost. Instant redraw available with online banking. Split your loan with fixed rate loan options.

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  • Offset Home Loan

    Owner Occupier, LVR<80%, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    3.84% p.a.
    4.09% p.a.

    Ability to open up to 10 offset accounts per loan account. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). Apply online in as little as 15 minutes.

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    Details
  • Back to Basics Special

    LVR<70%, Owner Occupier, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    3.67% p.a.
    3.68% p.a.

    Receive up to $4,000 cash when you take out an eligible Suncorp Bank home loan. Apply by 30 November 2022, settle by 28 February 2023. No monthly account keeping fee, no ongoing annual fee and no loan establishment fee on new lending of $150,000 or more. T&Cs apply.

    Compare
    Details
  • PAYG Investor Loan

    Investment, Principal & Interest, LVR<80%

    variable rate
    comparison rate
    Initial monthly repayment
    3.64% p.a.
    3.68% p.a.

    Low variable rate. Ideal for investors buying or refinancing. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

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    Details
  • Economy Variable Home Loan

    Owner Occupier, Principal & Interest, <80% LVR, $150,000+

    variable rate
    comparison rate
    Initial monthly repayment
    3.69% p.a.
    3.85% p.a.

    An ongoing low variable discount interest rate with free redraw, flexible repayment options and one free valuation. Discounted variable rate available for owner occupier lending with max LVR of 80%. Apply by 31 August 2022, Settle by 30 November 2022, and receive $2,500 cashback (T&Cs apply).

    Compare
    Details
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*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

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Offset home loans: what you need to know

If you’re looking to save on your home loan, picking one with an offset account may be just the ticket.

This excellent feature means your savings stash is constantly lowering the amount of interest you pay on your mortgage, even while you’re using those funds for your day-to-day spending and bills. We’ve written a full guide to offset accounts that you can read in more detail or, check out the answers to some of the top question about offset accounts below.

How an offset account works

Basically, instead of being charged interest on your full mortgage amount, you’re only charged interest on how much you’ve borrowed, minus the balance of your home loan offset account.

Here’s an example: Say you had a $300,000 mortgage and $50,000 parked in the attached offset account. Instead of paying interest on the full $300,000, you would only have to pay it on $250,000.

Since interest is charged as a percentage of your remaining principal, this 'offset' amount can mean huge savings over the life of a 25 or 30 year mortgage.

How much will I save with an offset account?

Now we get to the really important part: working out how much money an offset account could put back in your pocket.

Let’s return to our example from above. If you have a $300,000 home loan and $50,000 stashed in your offset account, you only pay interest on $250,000 of your loan. For argument's sake, let's say your home loan came with an interest rate of 4.00% and a loan term of 30 years. If you were paying interest on the full $300,000 amount, you’d be up for $215,609 in interest. But with your handy offset account, you’d only pay $179,674 in interest. That’s $35,935 saved, and you barely even had to lift a finger!

Keep in mind this example is only indicative, and you should crunch the numbers on your own home loan or talk to your lender to find out how much you could save long-term. But in the era of Reserve Bank rate hikes, offset accounts can prove to be a compelling option. 

What does a “partial offset account” mean?

Not all offset accounts are created equal, and it pays to double check what
you’re signing up for. A full offset account means that 100% of the funds in your account will be offset against what you owe on your home loan. A partial offset account means only a part of the balance in your account offsets against your home loan amount. 

So, using the same example as above, if you have $50,000 in your 40% partial offset account, that means $20,000 (40% of $50,000) would be deducted from your loan principal. So, on a $300,000 home loan and you’d pay interest on $280,000 of your original loan amount.

Compare offset account home loans interest rates 

Having an offset account attached to your loan can help reduce the amount of interest you pay and has the potential for big savings over the life on your home loan. However,  there's no true substitute for a truly competitive home loan interest rate. Our Home Loans Interest Rates page can help not only help you compare home loans with an offset account, but some of the available interest rates in the market.


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JP Pelosi
Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He loves a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

More FAQs about offset home loans

Does it cost more to have an offset account on my mortgage?

The short answer is: it might.

Generally, home loans with more features - like an offset account, extra repayments or a redraw facility - tend to have slightly higher interest rates attached than a basic, no-frills option. That means it's important to weigh up the cost of this higher interest rate, against the potential savings from having the offset account. It might only be a good idea if you have a large chunk of savings to park in the offset account.

The other added cost to consider is that some mortgages have an optional offset account, but you’ll need to pay an extra fee to access it. If this is the case, then just like with the interest rate, you’ll need to weigh up the benefit of having the offset account against the extra fee.

What’s the difference between an offset account and making extra repayments?

Another one of the features on offer for home loan borrowers trying to save on interest is the ability to make extra repayments. Similarly to an offset account, this lowers your principal loan amount quicker, cutting down on interest.

The benefit to making extra repayments is that you’re actually paying off your principal loan amount quicker, whereas with an offset account, you’re only lowering the portion of the loan amount you pay interest on. It’s also a little more common to find a mortgage offering extra repayments than an offset account.

The downside is that its less flexible. With your extra funds put away in an offset account, you can still access them, and use the account the same way you would a bank account. If you use those funds to make extra repayments instead, then you can no longer use them for daily spending. You may be able to get them back by using a redraw facility - but keep in mind there could be a fee for doing so, or a minimum amount you need to redraw.

It’s up to you to decide which option is better for your needs - or, if you opt for a full featured home loan, maybe you can use both!

How do I find the right offset mortgage for me?

Decided an offset home loan is right for you? Great! Now you just have to think about all the other aspects of a home loan, like the interest rate, fees, and other features. Then you have to find one that’s available for how much you want to borrow and works with the deposit you’ve saved up. Sound like a lot of work? Well, don’t worry, that’s where Mozo comes in.

You can check out some killer offset home loan options in the table above and click the blue ‘go to site’ button to go through to the lender’s website and start an application when you find one you like the look of.

Or why not use our home loan comparison tool to compare the rates and features on a huge number of mortgage offers from a range of lenders, including big banks, mutuals, online banks and non-bank lenders.

If you already have a home loan but want to refinance to an option that comes with an offset account (and a super low interest rate while you’re at it!) then take our Switch and Save calculator for a whirl. You can set it up to show you home loan options that suit your goals - whether that’s cutting down on your monthly repayments, or paying your mortgage off quicker.

Saving money on your home loan has never been so easy, huh?

Home Loan Reviews

Mortgage House Home Loan
Overall 1/10
Senior Broker or Clown?

Supposedly under a “senior broker,” he was incompetent from start to finish. He wrote on our documents that we were “divorced” and put a loan through twice. Possibly for the kickbacks. Not sure how many divorced ppl apply for a loan together. He made errors when it came to balancing our accounts. If we have no credit cards, how can we be spending more than we earn? He submitted a loan as though my husband and I were separate parties. As a result we were rejected from one of the big 4 banks. We have a mark now on our record because of this clown. He sent us emails about “land tax” that did not even apply to us. I emailed him to query emails he sent through which did not make any sense. Did he even read the application? We told him we had a savings account for the kids schooling. We told him what it was for several times, and it still appeared on the final contract as a question mark. When I asked him to remove it as it had been clarified, he told me I had to “pay their legal fees to have it removed.” One mistake after another. He claimed he put time and effort into our loan. The time he put into the loan was to correct all his own mistakes. (Took 4 months). We have no credit cards, no loan and own everything outright. He took so long that I had to push back the contractor who was waiting for the job. Our loan was approved by nab in 1hr in the end. They treated us with kindness and respect. I think the mortgage broker should be held accountable for leaving us with a bad credit record which stays on our account for 7 years. When I questioned him about all his errors, he said “we were not worth his time” and that he was not “making any money from us.” He cunningly said this on his mobile so it could not traced back to him. He tried to blame my husband and I for not filling out the paperwork. No integrity. Red flag for Mortgage House. If you are going to be in customer service, you need to be able to manage people without being rude. Mortgage house and this senior broker I have reported to AFCA! Don’t be deceived by the line of “we will return your application fee” at anytime. This was also a lie, which the senior broker spouted over and over again, only to find out he had lied about that too. My only regret is not recording the abuse I received from the “Senior Broker” so I could send it to AFCA. I would not even speak to my dog the way he spoke to me. He was angry that I had called him out on the lies and incompetency and did not have the decency to admit it. Their contract is 95 pages, so beware. It’s a red flag.

Read full review

Supposedly under a “senior broker,” he was incompetent from start to finish. He wrote on our documents that we were “divorced” and put a loan through twice. Possibly for the kickbacks. Not sure how many divorced ppl apply for a loan together. He made errors when it came to balancing our accounts. If we have no credit cards, how can we be spending more than we earn? He submitted a loan as though my husband and I were separate parties. As a result we were rejected from one of the big 4 banks. We have a mark now on our record because of this clown. He sent us emails about “land tax” that did not even apply to us. I emailed him to query emails he sent through which did not make any sense. Did he even read the application? We told him we had a savings account for the kids schooling. We told him what it was for several times, and it still appeared on the final contract as a question mark. When I asked him to remove it as it had been clarified, he told me I had to “pay their legal fees to have it removed.” One mistake after another. He claimed he put time and effort into our loan. The time he put into the loan was to correct all his own mistakes. (Took 4 months). We have no credit cards, no loan and own everything outright. He took so long that I had to push back the contractor who was waiting for the job. Our loan was approved by nab in 1hr in the end. They treated us with kindness and respect. I think the mortgage broker should be held accountable for leaving us with a bad credit record which stays on our account for 7 years. When I questioned him about all his errors, he said “we were not worth his time” and that he was not “making any money from us.” He cunningly said this on his mobile so it could not traced back to him. He tried to blame my husband and I for not filling out the paperwork. No integrity. Red flag for Mortgage House. If you are going to be in customer service, you need to be able to manage people without being rude. Mortgage house and this senior broker I have reported to AFCA! Don’t be deceived by the line of “we will return your application fee” at anytime. This was also a lie, which the senior broker spouted over and over again, only to find out he had lied about that too. My only regret is not recording the abuse I received from the “Senior Broker” so I could send it to AFCA. I would not even speak to my dog the way he spoke to me. He was angry that I had called him out on the lies and incompetency and did not have the decency to admit it. Their contract is 95 pages, so beware. It’s a red flag.

Price
1/10
Features
1/10
Customer service
1/10
Convenience
1/10
Trust
1/10
Less
Mare, New South Wales, reviewed 7 days ago
NAB Home Loan
Overall 9/10
Good customer service and home loan rates

The online banking and app is really user friendly and easy to use. Customer service is good, when I call I always get to speak to an advisor quickly and am not waiting on hold for a lifetime.

Read full review

The online banking and app is really user friendly and easy to use. Customer service is good, when I call I always get to speak to an advisor quickly and am not waiting on hold for a lifetime.

Price
8/10
Features
8/10
Customer service
9/10
Convenience
10/10
Trust
9/10
Less
Kathleen, New South Wales, reviewed 7 days ago
ANZ Variable Rate Home Loan
Overall 9/10
Like I said as above very happy with Kifayat Hussa

Kifayat Hussain is home loan manager at ANZ Dandenong branch. He is a very calm professional banker. Very knowledgeable and helped us a lot in every need. He is always available if we have questions . W9 t hesitate to recommend him.

Read full review

Kifayat Hussain is home loan manager at ANZ Dandenong branch. He is a very calm professional banker. Very knowledgeable and helped us a lot in every need. He is always available if we have questions . W9 t hesitate to recommend him.

Price
9/10
Features
9/10
Customer service
9/10
Convenience
9/10
Trust
9/10
Less
Maria, Victoria, reviewed 7 days ago

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