Mortgage offset accounts

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A guide to mortgage offset accounts

Updated March 19, 2024
Written by James Hurwood
Reviewed by Stephen Zeller

How do home loan offset accounts work?

Selling Houses Australia host, Andrew Winter, explains how offset accounts work, and why they may be beneficial to you.
Andrew Winter
Home Loans

Farewell paperwork, it's Home Loan Heaven


Expert tips for utilising a mortgage offset account

An offset account can be an invaluable home loan feature, but only if you know how to use it. With that in mind, our General Manager of Money, Stephen Zeller, has some offset account-related tips:

Stephen Zeller
General Manager – Money

Credit cards can pair with an offset account

A saving tip most people don’t know about is using a credit card in combination with your offset account. Credit cards tend to have an interest-free period up to 45 days, so instead of using your savings in your offset account, you could pay for your bills, groceries etc with a credit card. That way, you can keep your savings in your offset account and keep that money working for you. Before interest is charged to your credit card, transfer money from your offset account to the credit card to reduce the balance to zero, and you will not be charged any interest. Please keep in mind however, that credit cards are not for everyone, and you should seek professional financial advice before considering this as option suitable for you.

The higher your offset balance, the more you’ll save

Every dollar counts. As interest for a home loan is usually charged daily, the more money you can keep in your offset account, the sooner your loan will be paid out.

An offset account may be less optimal for investment loans

If you are considering an offset account for an investment property, it would be a good idea to discuss with your accountant/financial planner further to see if they have any alternative strategies in mind, as an accountant may feel an offset account is better utilised against an owner-occupied property.

Mortgage offset accounts explained

What is a mortgage offset account?

How do mortgage offset accounts work?

What are the different types of mortgage offset accounts?

Can I get a mortgage offset account on a fixed rate or investment home loan?

What are the benefits of an offset account?

Is a mortgage offset account better than just making additional payments on my home loan?

Mortgage offset accounts vs other options

What is a redraw facility?

Which is better: offset or redraw?

Should I get a mortgage offset account or a savings account?

Managing a mortgage offset account

Is there a minimum amount I’m required to have in a mortgage offset account?

Can I get a debit card linked directly to my offset account?

How do I get my salary paid directly into my mortgage offset account?

Can you have multiple mortgage offset accounts?

Meet our home loans expert, Stephen Zeller

Stephen Zeller
General Manager – Money

Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).

Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.