ASIC’s look into offset accounts: what every mortgage holder needs to know
If you’ve got a home loan — or you're planning to get one — chances are you've heard of a mortgage offset account. It’s often pitched as a smart way to save interest and pay off your home loan faster.
And that’s true — when it works as it should.
In August 2025, ASIC announced a formal investigation into how banks manage and promote offset accounts, so it’s a good idea to take a closer look at how they actually work, and what you should be doing to protect yourself, if you have one — or are considering it.
What’s an offset account? A quick reminder:
If you haven’t read our dedicated post on it, an offset account is simply a bank account (usually savings, but not always) that’s linked to your mortgage.
The money you keep in there doesn’t earn interest — instead, it reduces the interest charged on your loan (offsets it). So if your mortgage is $500,000 and your offset balance is $50,000, you only pay interest on $450,000.
It’s a great tool if you use it the right way and if the bank applies it properly.
Why the ASIC investigation?
ASIC’s concerns that some banks may be misleading customers — either in how offset accounts are described, how the interest savings are calculated or how they’re actually applied behind the scenes — are what triggered the investigation.
Included in this:
Offset accounts not being properly linked to the loan
Delays in applying the offset to interest calculations
Lack of clear communication around how much interest you're really saving
Fees or restrictions that reduce the benefit without customers realising.
What you should watch out for (now & always)
Whether you already have an offset account or you're about to get one, here are the key things to check:
Make sure your account is actually linked.
It sounds obvious, but errors happen. Double-check that your offset account is correctly linked to your loan — and that the bank is applying the balance daily, not monthly.Monitor your interest charges.
Use your bank’s app or login to internet banking to review monthly interest charges and make sure they reflect what you'd expect based on your offset balance.Know your terms and fees.
Some offset accounts come with monthly fees or require a package — make sure you’re not paying more in fees than you’re saving in interest.Check how many offsets you can have.
Some banks allow multiple offset accounts per loan (great for budgeting); others don’t. Be clear on how yours works.Stay informed if you're refinancing.
If you're switching lenders or loans, ask if the offset will still apply the same way — some “offsets” on fixed rates aren’t real offsets at all, but partial or redraw-style alternatives.
What you can do right now
Log in and check your offset balance and linkage
Call your bank and ask them to confirm how your offset is applied
Ask your mortgage broker to review your current loan and offset setup — especially if your circumstances have changed
Keep statements and compare interest charges against your offset balance over time.
While the ASIC investigation may encourage banks toward greater transparency and consistency, don’t wait for regulation to protect you. Make sure you know how your specific offset account works, what its features are - and that your bank is doing the right thing.
Offset accounts can still be one of the most powerful tools to reduce interest and repay your home loan faster… if they’re working properly — and working for you.
Stay sharp. Ask questions. And don’t just assume your bank has it sorted.
Need help reviewing your offset account or making sure your bank’s playing fair?
HoLo can help guide you through the process and break it all down into plain English.
If you’d like to know more, book an appointment below or contact us.
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