How a mortgage offset account works
An offset account is a transaction account that is linked to your home loan and has the functions of a regular everyday account. But what makes it so valuable to homeowners?
If you have a home loan of $300,000 and $20,000 in your offset account, you'll only be charged interest on a loan balance of $280,000. ($300,000 - $20,000 = $280,000).
Essentially, the balance in your account is offset against the amount owing on your home loan, potentially saving you thousands of dollars in interest repayments, taking years off your loan.
Most lenders only offer the offset feature as part of a variable rate home loan. However, Auswide Bank customers can access features not normally provided by other banks including an optional mortgage offset account with our fixed rate home loan.
Mortgage offset and redraw facility
A mortgage offset account and redraw facility~ are both valuable features to have as part of your home loan. Both of these features can help reduce the amount of interest you pay and help to pay off your loan sooner, but how are they different?
An offset account is linked to your home loan and is used like an everyday bank account. The funds in your account are ‘offset‘ against the balance of your home loan, reducing the interest owing on your loan.
Redraw facility, on the other hand, allows you to withdraw or ‘redraw’ any extra repayments you've made towards your home loan (above the required minimum amount) to use as you wish. While it's handy to access the redraw facility for unexpected bills, a holiday or a home reno; increasing your regular repayment above the minimum amount could help pay off your home loan sooner through reducing the interest charged over the life of the loan.
| Fees | Amount |
| Monthly fee | $10 $0 if you are an eligible Auswide Bank Freedom Plus Package customer.^ |
| ATM withdrawal | $0 When withdrawn at an Auswide Bank ATM or branch' |
| Electronic payments | $0 |
| Direct debit | $0 |
| BPAY® | $0 |
| Cheque deposit processing | $0 |
| Cash deposit | $0 |
| All fees and charges | View our Guide to Mortgage Offset Account for details |
Have some questions?
We’re here to help.
Helpful articles for you
Entertaining on a budget
Whether you're planning a birthday, Christmas lunch or a small celebration, find out how you can entertain while staying on budget.
How to save for your next holiday
Saving for a holiday might seem like an uphill battle at times, especially when you have other competing priorities and expenses. Howev...
Raising kids in Australia: Common costs and tips to help manage
Findings from the Choosi Cost of Kids Report sheds light on the unexpected financial pressures accompanying parenthood.
Looking to save money in the new year? Here's how to get started
While saving money is usually somewhere at the top of the list, now is the perfect time to work out how you will save more and what act...
Five life emergencies you should budget for
Life is unpredictable, and unforeseen emergencies can happen at any moment, and often our savings can suffer when funds are needed quickly.
