What Is an Offset Account — and Should You Get One?
You’ve probably heard the term “offset account” thrown around when it comes to home loans.
But what does it actually do? And more importantly — should you get one?
If you’re a first home buyer in Melbourne (or anywhere in Australia, really), this could be the difference between saving thousands or leaving money on the table.
🏦 What Is an Offset Account?
An offset account is a regular bank account linked to your home loan. The money you keep in there “offsets” your loan balance — reducing the interest you pay.
Let’s say:
You owe $600,000 on your loan
You have $20,000 in your offset account
You only get charged interest on $580,000
Every dollar in the offset = less interest. Simple.
💰 Why First Home Buyers Love It
You still have full access to your money
Every cent helps reduce your interest
It acts like a high-interest savings account (without the tax!)
You can save thousands in interest over the life of the loan
🧠 Offset vs Redraw — What’s the Difference?
Feature | Offset Account | Redraw Facility |
|---|---|---|
Access money? | Anytime like a bank acct | Usually via request |
Tax benefit? | Yes | No |
Transactional? | Yes (pay bills, transfer) | Not usually |
Best for? | Flexibility + saving int. | Repayment discipline |
📊 Is It Worth the Extra Cost?
Some loans with offset accounts have slightly higher interest rates or fees.
But in many cases, the savings outweigh the cost if you:
Keep a decent balance in the account
Use it to manage your salary + expenses
Avoid using credit cards unless you’re repaying in full
We’ll run the numbers and tell you straight if it’s worth it for your situation.
👥 Real Client Story: Shaun & Mia in Altona
These two were saving for a reno. Instead of keeping their $25k in a savings account, we set them up with an offset loan.
They saved $2,100 in interest in the first 12 months
Still had access to their money when they needed it
Used their offset like a regular account (easy!)
“Honestly didn’t realise how much money we were wasting before. Offset = game changer.”
🧩 How Nude Helps
We:
Explain loan features in plain English
Compare offset options across 30+ lenders
Structure your loan to make your money work harder
Offset might not be right for everyone — but if it is, we’ll help you do it smart.
✅ Want Your Home Loan to Work Smarter?
Offset accounts are just one tool — we help you use all of them.
