Using an offset account to help pay your mortgage faster

An offset account can help you reduce the interest you pay on your home loan. It works like any normal transaction account, except it’s linked to your home loan.

Any money you have in your offset transaction account is ‘offset’ against the balance in your home loan account, reducing the amount on which interest is calculated on that day. Interest on your home loan balance is calculated daily, so the more money you can keep in your offset account each day, the more your home loan interest will be reduced.

You can choose to open a single or joint offset account from the Bankwest App, if you have an eligible Complete Variable Home Loan or Complete Fixed Home Loan. Otherwise, get in touch with us to open your new account.

This might sound obvious, but the more money you have in your offset account, the more your home loan interest will be reduced.
 

This way, it will be offset against your home loan on the day you get paid.
 

If you choose to use a credit card for your everyday purchases, it could help you keep more money in your offset account during the month – which means being charged less interest on your home loan.

Remember that it’s important to pay off your whole credit card statement balance (excluding any balance transfer amount) by the due date each month to avoid purchase interest and any late payment fees. After all, you don’t want to cancel out any potential home loan interest savings with credit card fees. If you have a credit card with Bankwest, you can also use Bankwest Easy Alerts in the Bankwest App to receive an alert before your credit card payment is due.

Of course, consider what’s right for your financial situation. If using a debit card instead for your everyday spending suits you better, our offset accounts come with debit card facilities.

Did you know that you can open up to nine offset accounts with your eligible Bankwest home loan? You could use them as ‘buckets’ for the things you regularly spend money on and save for – it’s one way to manage your money, while also saving on home loan interest. Plus, you can get a Debit Mastercard® for every offset account, so you can easily access your money.

Keep in mind that a monthly fee applies for each offset account held by customers who don’t have an eligible Complete Home Loan Package. Learn more about bucketing.

Remember, it's always a good idea to get independent financial advice when it comes to managing your finances.

• If you’re using a credit card, be careful. Over-spending on your card can lead to financial difficulty, and not paying it off on time will incur a much higher interest rate on your card compared to the interest rate you pay on your home loan. This will cancel out the benefits of your offset account. You should also check the amount you pay in credit card fees, as they may be more than the benefits the card offers for your offset.
  
• Make sure you check the conditions of your home loan. Depending on the loan type and the provider, you might only be able to have some of your offset account’s balance offset against your loan. Instead of 100% of the money in your account offsetting your home loan, maybe only 40% of the balance is taken into account. Generally, fixed rate mortgages are less likely to offer a 100% offset.
  
• While offset accounts are free for some home loan packages, for others you may have to pay a monthly fee for each offset account. Be sure to check your home loan terms and conditions.