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Offset Home Loans

Stashing your savings in an offset account can save you a tonne of money on your home loan - and the best part is that it’s super easy to do. Take a look at some of the top Offset Home Loans on Mozo in the table below.

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What exactly is an offset account?

Good question! An offset account is a lot like a regular bank account, except that the balance you keep in it will offset daily against the principal amount of your mortgage, so you pay less interest. You can still use offset account just like you would a regular bank account, including having your salary paid into it, setting up direct debits and using a linked debit card for everyday purchases.

Which home loans come with an offset account?

Generally speaking, offset account are offered with variable rate home loans, which are usually more flexible in terms of extra features. If you’re opting for a fixed rate loan, it’s less likely to have an offset account attached. The other option is to split your loan between fixed and variable rates. In this case, the savings from your offset account will be applied only to the variable portion of your loan.

How do I apply for an offset home loan online?

It’s easy! Once you’re satisfied that you’ve found the perfect offset home loan for your property buying needs, just click the blue ‘go to site’ button in our comparison table below. That will take you through to the lender’s website, where you can find more information and start your application.

Offset home loan comparisons on Mozo - last updated February 28, 2021

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • Smart Home Loan with Offset 80

    Owner Occupier, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    2.58% p.a.
    2.60% p.a.

    Offset redraw facility has no monthly fees and get unlimited access to your funds. Unlimited free redraws with no minimum redraw amount. Apply online.

    Compare
    Details
  • Offset Home Loan

    Owner Occupier, LVR<70%, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    2.54% p.a.
    2.81% p.a.

    Handy offset account to help pay your home loan off sooner. Up to 10 offset accounts per loan account available. Fee free access at ATMs. Waived credit card annual fee. $0 international purchase fees.

    Compare
    Details
  • Discounted Variable Home Loan

    Owner Occupier, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    2.94% p.a.
    3.34% p.a.

    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. Limited time offer extended, T&Cs apply.

    Compare
    Details
  • Smart Booster Home Loan

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

    variable rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a.
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.

    Compare
    Details
  • Economy Variable Home Loan

    Owner Occupier, Principal & Interest, <70% LVR

    variable rate
    comparison rate
    Initial monthly repayment
    2.59% p.a.
    2.76% p.a.

    An ongoing low variable interest rate with free redraw, flexible repayment options and one free valuation. Discounted Economy variable rate available for owner occupier lending with max LVR of 70%.

    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 , everything you need to know

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.

How does an offset account work?

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.

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 you’re 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.

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.

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?

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They helped me a lot when my ID was stolen and I had lost much money (which I got back thanks to them). Also they gave us a much reduced home loan interest rate.

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