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An offset savings account is a type of bank account that is linked to an eligible mortgage loan. The balance in your offset account reduces the amount of your mortgage loan that is subject to interest charges.
For example, if you have a mortgage of $500,000 and have $10,000 sitting in your offset savings account, you'll only pay interest on $490,000 instead of the full $500,000. This can save you money on interest over time since you are being charged on a smaller loan amount.
While the money in your offset account doesn’t earn interest like a regular savings account, it helps reduce the amount of interest you pay on your home loan. It allows you to save money while keeping access to your funds whenever you need them.
If you have multiple mortgages, then you can have multiple offset accounts. Each home loan will be linked to it's own offset account.
Our eligible home loan products that can be linked to an offset account are :
A redraw and an offset are not the same thing, although they have some similarities. If you make additional repayments to your mortgage, they will sit in redraw which will reduce the amount owing and therefore reduce the interest charged.
The offset account is separate from your mortgage where the balance offsets against the home loan balance to lower the interest you pay.
An offset account can also be used as an everyday account where money in redraw may be subject to more rules and fees may apply.
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