Banks repay mortgage offset mistakes
Since this problem was identified, Bankwest has updated its systems to automatically link of new offset accounts to the customer’s mortgage.
The government’s corporate regulator, the Australian Securities and Investment Commission has warned some non-bank lenders that their marketing of mortgage offset accounts could mislead borrowers. ASIC is concerned that borrowers understand that money held in offset account is not always covered by the government’s deposit guarantee.
What is a mortgage offset account?
A mortgage offset account is a savings or transaction account that is linked to your home loan. The balance in the account is “offset” against the principal amount outstanding on your loan. The loan amount that is attracting interest is reduced so your interest bill goes down.
Mortgage offset can save you thousands of dollars over the life of your loan. Some lenders offer 100 per cent offset accounts (which offset the entire balance against the while others offer lower percentage offsets, like 50 per cent.
How to find a home loan with a good offset account
You can search for, compare and research home loans from all of Australia’s major lenders here.
You can find out if they offer an offset account with their home loans and compare these accounts by clicking on the features tab near the top left hand corner of the InfoChoice home loans comparison table.
For example, the InfoChoice features tab will tell you that Homestar’s Owner Occupied Loan offers mortgage offset but Mortgage House’s Simple Summer Special does not.