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!
2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
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.
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.
Read our Mozo Review to learn more about the Smart Booster Home Loan
Owner Occupier, Principal & Interest, <80% LVR
Lock in a competitive rate for 2 years. Only 20% deposit required. Flexible repayment options and make up to $5,000 in additional repayments annually. Refinance to BOQ by 29 August, 2021 and get $3,000 cashback(T&Cs apply).
Lock in a competitive rate for 2 years. Only 20% deposit required. Flexible repayment options and make up to $5,000 in additional repayments annually. Refinance to BOQ by 29 August, 2021 and get $3,000 cashback(T&Cs apply).
Read our Mozo Review to learn more about the Discount Fixed Rate
Owner Occupier, Principal & Interest, LVR <70%
Special rate applies to home loan applications submitted by 31 July 2021. Unlimited additional repayments, free redraw, 100% offset account. 30% deposit required. Simple online application. Low Cost Home Loan winner in the Mozo Expert's Choice Awards for 2021.
Special rate applies to home loan applications submitted by 31 July 2021. Unlimited additional repayments, free redraw, 100% offset account. 30% deposit required. Simple online application. Low Cost Home Loan winner in the Mozo Expert's Choice Awards for 2021.
Read our Mozo Review to learn more about the Variable Home Loan Special
Investor, Principal & Interest, LVR <80%
Zero ongoing fees and free extra repayments and redraw facility with an option for an offset account. Winner of the Offset Home Loan Expert's Choice Award for 2021.
Zero ongoing fees and free extra repayments and redraw facility with an option for an offset account. Winner of the Offset Home Loan Expert's Choice Award for 2021.
Read our Mozo Review to learn more about the Well Balanced
Owner Occupier, Principal & Interest
Enjoy a great low rate with no ongoing fees. Ability to split your loan between fixed and variable. 100% offset account. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent.
Enjoy a great low rate with no ongoing fees. Ability to split your loan between fixed and variable. 100% offset account. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent.
Read our Mozo Review to learn more about the Discounted Variable Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR <60%
Competitive fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
Competitive fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
Read our Mozo Review to learn more about the Own Home Loan
Owner Occupier, Principal & Interest, LVR <80%
Read our Mozo Review to learn more about the Offset Variable
Investment, Principal & Interest, LVR<80%
Read our Mozo Review to learn more about the Variable Rate Loan
Owner Occupier, LVR<60%, Principal & Interest
Flexible loan structure. Ability to open up to 10 offset accounts per loan account. Includes a Debit Mastercard and transaction account for everyday transactions. All ATM fees in Australia are instantly refunded.
Flexible loan structure. Ability to open up to 10 offset accounts per loan account. Includes a Debit Mastercard and transaction account for everyday transactions. All ATM fees in Australia are instantly refunded.
Read our Mozo Review to learn more about the Offset Home Loan
^See information about the Mozo Experts Choice Home loans Awards
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If you’re looking to save on your home loan, picking one that comes with an offset account attached 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.
So you know that an offset account can save you on interest - but just how does it do that?
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 loan amount, this lowered principal amount can mean huge savings over the life of a 25 or 30 year mortgage.
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.
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.
Having an offset account attached to your loan can help reduce the amount of interest you pay and has the potential for big savings However, one other easy way to save on interest is to choose a 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.
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.
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!
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?
Takes more than a month for a simple loan rate fix. They then fix the wrong loan with wrong rate. They tried to renege on the phone call that was made to fix the rate. You can never speak to a supervisor. Thank goodness for the AFCA Ombudsman.
Read full reviewTakes more than a month for a simple loan rate fix. They then fix the wrong loan with wrong rate. They tried to renege on the phone call that was made to fix the rate. You can never speak to a supervisor. Thank goodness for the AFCA Ombudsman.
St. George provide competitively priced products but customer support is terrible. I recently sold my house with settlement occurring on 19 July. St George's representative collected the buyer's bank check at the settlement ceremony and released property to the buyer. It is now three days later and my internet banking account with St George is not reflecting that the mortgage has been discharged or credited my account with the balance from the sale. It took an hour on the phone to find out status of settlement. I was given some long winded answer about the delay being caused by one of the many teams in St George. I don't really care about internal operational delays at St George, there is no justification for the delay and a make good payment of interest payable for the three days should occur. On another occasion I was enquiring about a mortgage to purchase another property. St George does not allocate loan applications to a single relationship manager and as a result each time I called during the application process I had to start again with a new person. Further no ticket or reference number is generated and almost no information is retained in their CRM system. This is basic client relationship stuff! I get the sense that you have reduced your workforce and outsourced customer support to the Phillipines under cover if COVID all while collecting government support payments and cheap government funding which has assisted all banks to achieve record profits. St George's infrastructure appears outdated and your customer service model is not responsive. Like all banks St George is going to loose market share to the more agile non-bank sector. I will never deal directly with St George ever again.
Read full reviewSt. George provide competitively priced products but customer support is terrible. I recently sold my house with settlement occurring on 19 July. St George's representative collected the buyer's bank check at the settlement ceremony and released property to the buyer. It is now three days later and my internet banking account with St George is not reflecting that the mortgage has been discharged or credited my account with the balance from the sale. It took an hour on the phone to find out status of settlement. I was given some long winded answer about the delay being caused by one of the many teams in St George. I don't really care about internal operational delays at St George, there is no justification for the delay and a make good payment of interest payable for the three days should occur. On another occasion I was enquiring about a mortgage to purchase another property. St George does not allocate loan applications to a single relationship manager and as a result each time I called during the application process I had to start again with a new person. Further no ticket or reference number is generated and almost no information is retained in their CRM system. This is basic client relationship stuff! I get the sense that you have reduced your workforce and outsourced customer support to the Phillipines under cover if COVID all while collecting government support payments and cheap government funding which has assisted all banks to achieve record profits. St George's infrastructure appears outdated and your customer service model is not responsive. Like all banks St George is going to loose market share to the more agile non-bank sector. I will never deal directly with St George ever again.
I have been a bank west customer for just over 12 months now having multiple home loans with them and the terrible customer service and wait times on hold -- I would not recommend bank west to my worst enemy let alone a friend.
Read full reviewI have been a bank west customer for just over 12 months now having multiple home loans with them and the terrible customer service and wait times on hold -- I would not recommend bank west to my worst enemy let alone a friend.
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