Looking for ways to save on your mortgage? You’re not alone. Many Australian homeowners are taking advantage of a clever feature called an offset account to reduce their interest costs and pay off their home loans more quickly. 

If you’re unsure how it works or whether it’s right for you, continue reading. We’ve got the answers here.

What Is an Offset Account?

An offset account is a type of bank account linked to your home loan. Instead of earning interest, the balance in this account reduces the interest charged on your mortgage.

For example, if you owe $500,000 on your mortgage and you have $50,000 in your offset account, you’ll only pay interest on $450,000.

It works like a regular transaction account. You can deposit your salary, pay bills, and access funds whenever needed.

How Does an Offset Account Save You Money?

The key benefit is interest reduction. Mortgage interest in Australia is calculated daily and charged monthly. By keeping money in your offset account, you're effectively lowering your daily loan balance.

This means you pay less interest over time, which helps reduce your loan term and overall repayments. Even small balances in an offset account can add up to thousands in savings over the life of the loan.

Why Offset Accounts Make Sense for Logan Homeowners

Logan is one of the fastest-growing regions in Queensland, with many families taking out new home loans. With property prices rising, smart financial tools are essential.

An offset account gives Logan homeowners:

• Greater control over mortgage repayments
  
  
• A flexible way to reduce interest without locking up savings
  
  
• An easy strategy to potentially shave years off a 30-year loan term
  
  

If you’re planning to buy or refinance in Logan, it’s worth discussing an offset option with your mortgage broker.

Full Offset vs Partial Offset Account

Not all offset accounts are created equal.

• Full Offset Account: 100% of your account balance offsets your loan. These are usually linked to variable rate loans.
  
  
• Partial Offset Account: Only a portion of your balance (e.g., 40% or 50%) offsets your loan. These are more common with fixed rate loans.

Always read the loan terms or ask your mortgage broker which option suits your situation.

Offset vs Redraw Facility – What's the Difference?

Both options reduce interest costs, but they work differently:

• Offset Account: Money stays in a separate account. Easy to access anytime.
  
  
• Redraw Facility: Extra repayments reduce your loan balance. You can access them, but redraws may take longer and have limits.

Offset accounts offer more day-to-day flexibility, especially for people who like to keep cash flow handy.

Who Benefits Most from an Offset Account?

Offset accounts are ideal if you:

• Receive regular income (like a salary or rent)
  
  
• Keep a consistent balance in your savings
  
  
• Prefer quick access to your funds
  
  
• Want to reduce interest without making extra repayments

It’s a particularly useful tool for households who want flexibility while still tackling their mortgage.

Tips to Maximise Your Offset Account

To really get the most out of your offset account, try these strategies:

• Deposit your salary directly into your offset
  
  
• Pay bills closer to their due date to keep funds in the account longer
  
  
• Combine your savings into one offset account
  
  
• Use a credit card for everyday spending (responsibly!) and pay it off before interest is charged
  
  
• Avoid withdrawing large amounts unless necessary

These actions help keep your offset balance higher, saving you more in interest.

Are There Any Downsides?

While offset accounts are beneficial, consider the following:

• Some lenders charge monthly or annual account fees
  
  
• Loans with offset features may have slightly higher interest rates
  
  
• You might be better off with a redraw facility if you don’t maintain a large balance

That’s why it’s important to compare home loan features or speak with a broker before deciding.

How Cube Loans Can Help You Set Up an Offset Account

At Cube Loans, we help Logan residents find the right mortgage solutions. Our brokers can:

• Explain your offset options in plain English
  
  
• Compare lenders that offer full and partial offset accounts
  
  
• Help you combine features like redraw, split loans, and variable/fixed rates
  
  
• Provide ongoing support throughout your loan journey

We take the stress out of home loans, so you can focus on building your future.

FAQs

What is an offset account in Australia?

An offset account is a transaction account linked to your mortgage. The balance offsets your loan, reducing the interest charged.

Is it better to use an offset account or make extra repayments?

Both save interest. Offset accounts offer more flexibility, while extra repayments may reduce the loan faster but are less accessible.

Can I use an offset account on a fixed-rate loan?

Some lenders offer partial offset accounts with fixed-rate loans, but they’re less common than with variable loans.

Do offset accounts have fees?

Yes, many offset accounts have monthly or annual fees. Compare products to ensure the savings outweigh the costs.

How much can I save with an offset account?

It depends on your loan amount, interest rate, and offset balance. Even a few thousand dollars in offset can save thousands in interest.

Can I have multiple offset accounts?

Some lenders allow multiple offset accounts to be linked to a single loan. This can help you organise finances while still saving interest.

What banks in Australia offer offset accounts?

Most major banks and lenders in Australia offer offset accounts, including ANZ, Commonwealth Bank, NAB, Westpac, and non-bank lenders.

Bottom Line: Offset Accounts Are a Smart Mortgage Strategy

In today’s growing property market, every dollar counts. Using an offset account is a smart, flexible, and effective way to cut down your mortgage interest, save money, and potentially pay off your home sooner.

It’s not about how much you earn, it’s about how you manage your money. Even keeping a few thousand dollars in your offset account can make a real difference over time.

At Cube Loans, we’re here to help you make informed decisions with your mortgage. If you're a Logan homeowner or planning to buy in the area, let's chat about how an offset account could work for you. Call us at 1800 774 756 to get started, and let our team of Logan mortgage brokers guide you every step of the way.