Two of Australia’s biggest banks, NAB and Westpac, have announced a powerful new mortgage feature allowing customers to set up multiple offset accounts linked to their home loans. This move follows growing demand for offset accounts, with NAB revealing that around 70% of new homeowners are now utilizing them.
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Offset accounts are transaction accounts tied to home loans that reduce the amount of interest paid by offsetting the loan balance. Now, NAB and Westpac customers can link up to 10 separate offset accounts, maximizing their potential savings and financial flexibility.
How Multi-Offset Accounts Work to Slash Interest Payments
Personal finance expert Rachel Wastell described offset accounts as one of the most underrated tools in homeownership. “They work 24/7 to shrink your interest bill, simply by letting your money sit in the right place,” she explained.
For example, a homeowner with a $500,000 mortgage and $10,000 in an offset account would only pay interest on $490,000. Westpac calculated that by depositing an additional $100 each month into an offset account, a borrower could save over $110,000 in interest and shorten a 30-year home loan by nearly three years.
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Why Homeowners Are Excited About Multiple Offset Accounts
More Financial Control and Flexibility
NAB executive Andy Kerr highlighted that Australians often categorize their money into separate buckets for expenses like bills, emergency funds, and holidays.
“With multiple offset accounts, they can continue doing this while saving even more on their home loan interest,” Kerr said. “They no longer have to sacrifice one for the other.”
Westpac managing director of mortgages, Damien MacRae, echoed this sentiment, stating that multi-offset accounts enhance visibility and control over financial management, cash flow, and savings.
Joint Loans with Separate Finances
Another advantage of multiple offset accounts is that they enable friends or family members who co-own a property to reduce interest payments while keeping their finances separate. This flexibility is particularly beneficial for modern homeownership arrangements.
The Catch: Are Multi-Offset Loans Right for Everyone?
While multi-offset accounts offer significant savings, they can sometimes come with higher interest rates and fees compared to standard home loans. Homeowners should carefully assess their financial situation before opting in.
ANZ Stands Alone as the Last Major Bank Without Multi-Offset Accounts
While Commonwealth Bank already offers up to 99 offset accounts per eligible home loan, NAB and Westpac are now catching up with their new offering.
Westpac’s subsidiaries, including St. George, Bank of Melbourne, and BankSA, also support multiple offset accounts. However, ANZ remains the only major bank that still limits customers to just one offset account, potentially putting them at a competitive disadvantage.
Final Thoughts: Should You Consider Multiple Offset Accounts?
For homeowners looking to maximize savings and financial control, multiple offset accounts could be a game-changer. Whether you’re saving for a vacation, an emergency fund, or simply trying to pay off your mortgage faster, this new feature offers a smarter way to manage your money.
Would you take advantage of multi-offset accounts? Let us know your thoughts!
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