Over the past 12 months, home loan customers with an offset account increased by nearly 10%, while total account balances increased by a similar amount.
Borrowers with a $500,000, 30-year home loan with an interest rate of 4.50% p.a. who have a starting offset balance of $10,000 and decide to add a $100 deposit into their offset every month could save in excess of $60,000 over the life of their loan.
Michael Baumann, CommBank Executive General Manager Home Buying, said an interest in finding better ways to save money amid rate rises was one of the main drivers for customers opening offset accounts.
“At Commonwealth Bank, we offer eligible home loan customers the option to take advantage of multiple free offset accounts, which is perfect for those people who like to give their money a specific task and then set it aside into different accounts to ensure it is only used for its designed purpose,” Mr Baumann said.
The recent growth in offset accounts follows research from earlier this year when over 90% of homeowners said they were preparing for a rate rise before the RBA officially moved.
Of those, 37% of homeowners said they were putting more money into their offset or redraw facility.
“We know that one in two CommBank customers are more than three months ahead of their home loan repayments and it is encouraging that the majority of Australian homeowners are taking proactive steps to continue to improve their financial position with rates expected to continue to increase over the next 12 to 18 months,” Mr Baumann said.
According to the RBA’s Statement on Monetary Policy August 2022, net payments into offset and redraw accounts have declined slightly since mid-2021, but remain above pre-pandemic levels.
Since the start of the pandemic, mortgage borrowers’ payments into offset and redraw accounts have been substantial, totalling around $100 billion.
This equates to roughly 6.25% of annual household disposable income.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $2,408 | Principal & Interest | Variable | $0 | $530 | 70% | Featured Online ExclusiveUp To $4K Cashback |
| |||||||||
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Featured Apply In Minutes |
| |||||||||
5.99% p.a. | 6.51% p.a. | $2,589 | Principal & Interest | Variable | $0 | $530 | 90% |
Image by Andreas Breitling via Pixabay
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