How to Use an Offset Account Like a Pro
An offset account might just be the most powerful mortgage feature you’re not using right.
At Nude Home Loans, we help first home buyers use offset accounts to save interest, build flexibility, and pay off loans faster — without changing your lifestyle.
Let’s break it down.
🧠 What Is an Offset Account?
An offset account is a regular bank account linked to your home loan.
Instead of earning interest (like a savings account), it “offsets” the balance of your mortgage.
Example:
You owe $500,000 on your home loan
You have $20,000 in your offset account
The bank only charges interest on $480,000
Result? Less interest = more of your repayment goes toward the principal.
🆚 Offset vs Redraw: What’s the Difference?
Feature | Offset Account | Redraw Facility |
|---|---|---|
Access to funds | Instant (like a bank acct) | Must request via lender |
Interest savings | Yes | Yes |
Tax implications | Better for investment use | Can get messy |
Visibility | Daily balance updates | Not always in your netbank |
Offset = more flexible, more transparent.
💰 How It Saves You Thousands
Every dollar in your offset saves you interest every day. Over time, this compounds into huge savings.
Example:
$500k loan at 6% over 30 years
Keeping $20k in your offset
= $70,000+ saved in interest and loan paid off 3+ years earlier.
🧩 How to Set It Up
We help clients:
Choose a loan that includes a 100% offset (not all do)
Link the right account with no fees or restrictions
Set up automatic transfers so it runs itself
📥 Best Offset Account Habits
Salary in, bills out
Have your pay go straight into your offset
Keep your cash sitting there as long as possible
Use a credit card for expenses
Pay it off in full each month
Gives your offset balance more time to reduce interest
Keep lump sums there
Tax refunds, bonuses, side hustle income
Don’t park savings in a low-interest account — offset is more powerful
🔄 Offset for Everyday Life
It works even when you:
Go on holiday
Take parental leave
Switch jobs
Because every day your money’s sitting in offset, you’re winning.
🏡 Real Client Example: Jess & Mikey in Melbourne
Jess & Mikey had $15k in savings and a $650k loan.
Instead of putting that toward a holiday, we showed them how to:
Keep it in an offset
Add $200/month in regular deposits
Save over $38,000 in interest over their first 10 years
“We didn’t even notice the difference — but our mortgage balance sure did.”
🧮 When an Offset Doesn’t Make Sense
Sometimes, you’re better off without it:
Low balance in offset (<$5k ongoing)
Paying higher annual package fees that outweigh savings
If you tend to spend what you see (temptation factor!)
We help you crunch the numbers and choose what actually saves you more.
✅ Want to Use an Offset Account Like a Pro?
We’ll:
Check if you’re eligible
Compare offset vs redraw based on your habits
Set up a strategy to save interest and stay flexible
👉 [Book a home loan strategy session with Nude Home Loans]
Don’t let your bank account just sit there. Make it work for you.
