Making Your Money Work Harder: Understanding Offset Home Loans

If you’ve heard about Revolving Credit, you might already know there are smarter ways to manage your mortgage. Another powerful option is the Offset Home Loan – a structure that helps you save interest while keeping your savings separate and accessible.

What is an Offset Home Loan?

An Offset Home Loan is similar to a Revolving Credit, but it works a little differently. Instead of using a single account where your salary and expenses flow in and out, an Offset Home Loan lets you link your everyday and savings accounts to your mortgage.

The balances in those linked accounts “offset” your home loan – meaning you only pay interest on the difference.

How It Works

Here’s a simple example:

If your mortgage is $500,000 and you’ve got $20,000 sitting in savings, you’ll only be charged interest as if your loan were $480,000.

The more you save across your linked accounts, the less interest you pay on your mortgage.

Why People Like It

Unlike a Revolving Credit, you don’t draw directly from the loan itself. You keep your savings in separate accounts and use them as normal – but while they sit in the bank, they’re quietly working for you.

The big advantage?

You get to keep your money accessible for emergencies, holidays, or future plans – while it also reduces the interest cost on your home loan.

Is an Offset Home Loan Right for You?

If you like the idea of keeping your savings separate but still want them to help reduce your mortgage faster, an Offset Home Loan could be a smart fit. It’s particularly effective for people who maintain consistent savings or business owners who hold regular cash balances.

To see how it works, watch this video by our Director, Mils Muliaina.

At The Mortgage Hub, our advisers can show you how to structure your loan to get the most out of your income and savings.

Our advice is always free – so send us a DM or get in touch today to see whether an Offset Home Loan fits your financial game plan.