Multiple offset accounts can be a game-changer when managing your home loan and maximising your savings. Offset accounts allow you to reduce the interest payable on your home loan by linking several savings or transaction accounts to it, helping you boost your savings and even pay your loan off faster
Most banks offer offset accounts on some of their products, however not all banks offer a multiple offsets feature, so it’s important to know which lenders can give you the flexibility to use multiple offset accounts. In this blog, we’ll take a look at which banks allow multiple offset accounts and how you can benefit from this feature.
What is an offset account?
An offset account is a strategic tool that can help you reduce the interest on your home loan, potentially saving you thousands over the life of the loan. By linking your accounts to your mortgage, the balance in these accounts is used to “offset” the loan amount, lowering the interest that is being paid.
For example, if you have a $500,000 mortgage and $20,000 in your offset account, you will only be charged interest on $480,000, rather than the full loan amount.
Why multiple offset accounts matter
Having the ability to link multiple offset accounts can provide several advantages:
- Maximising your savings – Different accounts for specific purposes (e.g. a savings account, an everyday account, and an emergency fund) can all offset the mortgage, reducing the interest on your loan even further.
- Better financial management – Multiple offset accounts allow for a greater level of flexibility in managing your funds. You can separate your savings for different goals while still benefiting from the offset.
This feature is a game-changer for those looking to optimise their financial strategy and make their money work harder. With multiple offset accounts, you can stay organised, achieve greater clarity in your financial planning, and reduce the overall cost of your home loan – all while ensuring your funds are allocated exactly where they’re needed.
Banks that offer multiple offset accounts
Not every lender allows you to have multiple offset accounts. It’s important to have a chat with your broker before selecting a lender as there are a range of factors you’ll need to consider, outside of whether they have multiple offsets or not. If you’re looking to take advantage of multiple offset accounts, here are the banks that offer this feature:
- Commonwealth Bank (CBA) – Up to 99 per home loan
- Bank of Melbourne – Up to 99 per home loan
- uBank – Up to 10 per home loan
- Bankwest – Up to 9 per home loan
- Beyond Bank – No limit
- Macquarie – Up to 10 per home loan
- ME Bank – Up to 8 per home loan
- Suncorp – Multiple offsets
- Bank Australia – No limit
- NAB – Up to 10 per home loan
While some banks offer significant flexibility with multiple offset accounts, others are more limited in their offerings, so it’s essential to understand the options available before choosing a lender.
Key considerations before choosing a lender
Before you decide on a bank or lender that offers multiple offset accounts, keep these key factors in mind:
- Home loan features – While rates are important, sometimes people will choose a higher rate to get additional loan features such as flexible repayments, the ability to make extra repayments and multiple offset accounts. Make sure you consider how these features suit your financial needs and goals.
- Fees and Charges – Some banks may charge account maintenance or transaction fees. Your broker can chat with you about what fees and charges may apply to the loan and what long-term impact this may have.
- Flexibility – Look for banks that provide flexibility in how you manage your offset accounts, such as easy transfers between accounts and no limitations on the types of accounts that can be linked.
Multiple offset accounts can be a powerful tool for reducing the interest you pay on your home loan and improving your financial management. While not all banks offer this feature, several leading banks do, providing a valuable benefit for homeowners who want to make the most of their savings.
Understanding your home loan options can be overwhelming but with the right knowledge, the right support and the right strategy it doesn’t have to be. Are you ready to take control of your financial future and find out how offset accounts can work for you? Let’s chat today.