Offset

A great way to save interest is by using the balance from a savings and transaction account to offset against the remaining balance of your loan. This feature is available on the Standard Variable home loan only, and you’ll enjoy no monthly account keeping fee on your Everyday Options account¹ while it’s in offset mode.

How offset mode works

The interest payable on your linked home loan is calculated on the balance owing, less the balance of your Everyday Options account and any linked Sub-accounts (excluding any “flexiRates” you have). So you’ll pay less interest on your loan when you have money in your Everyday Options Account in offset mode.

To put it simply, the larger the balance you hold in your Everyday Options account and Sub-accounts, the less interest you’ll end up paying on your home loan.

Offset mode in action

For example, say you have $10,000 in your Everyday Options account, including $2,000 locked away in a flexiRate. You have $100,000 owing on your standard variable rate home loan.

When calculating your interest we’d subtract $8,000 (i.e. $10,000 – $2,000) from the $100,000 owing on your home loan, meaning you’ll only pay interest on $92,000. There’s no minimum amount required in your Everyday Options account to benefit from offset, which means every dollar you have in your account (excluding funds subject to FlexiRates) will save you interest on your home loan.

Interest is calculated daily, so you’ll benefit every day you keep your income and savings in your Everyday Options account (including any funds in your linked sub-accounts that are not flexiRates).

It’s important to remember that while your Everyday Options account is in offset mode, you won’t earn interest on any savings in the sub-accounts that you open. If you choose to lock away a portion of your money in a “flexiRate” you’ll continue to earn interest, but this money won’t count towards reducing the interest payable on your home loan.

Click here for full details on our Everyday Options account.

Fees

A once off $75.00 Mortgage Offset Fee is charged to your linked loan account.

Example:

The table below illustrates three examples of how credit balances in Everyday Options Accounts operate in offset mode and affect the interest payable on a linked home loan.

Main Account = $2000

Combined with

Sub-accounts = $20,000

Main Account = $2000

Combined with

Sub-accounts = $20,000

Main Account = $2000

Combined with

Sub-accounts = $20,000 ($8,000 in flexiRates)

$122,000

$15,000

$114,000

Use combined account balance of $22,000 to calculate offset benefit
Pay you no interest on the $2,000 in the main account
Pay you no interest on the $20,000 credit balance in your Sub-account/s
Not charge interest on $22,000 of your linked home loan balance
Charge interest on the remaining $100,000 of your linked home loan balance

Use $15,000 of the $22,000 combined account balance to calculate offset benefit
Pay you no interest on any part of the credit balance (including the $7,000 amount by which the balance of your Everyday Options Account/s exceeds the balance in your Linked Home Loan) in your Everyday Options Account/s
Not charge interest on the total balance of $15,000 of your linked home loan.

Use combined account balance of $14,000 to calculate offset benefit ($22,000 total minus $8,000 flexiRates)
Pay you no interest on the $2,000 in the main account
Pay you credit interest on the $8,000 in flexiRates
Pay you no interest on the $12,000 in credit balance in your Sub-account /s
Not charge interest on $14,000 of your linked home loan balance
Charge interest on the remaining $100,000 of your linked home loan balance.

Offset

How offset mode works

Offset mode in action

Fees

Example:

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