New data from Commonwealth Bank shows the use of mortgage offset accounts has continued to increase.
Over the past 12 months, CBA has recorded growth in the proportion of eligible customers with an offset account as well as an increase in the balances associated with these offset accounts.
The proportion of customers with an offset account grew by just under 10 per cent, while total account balances increased by a similar amount over the 12 months to July 2022.
Commonwealth Bank’s Executive General Manager Home Buying, Dr Michael Baumann, said while some of the growth in offset accounts could be attributed to certain seasonality factors, it was also clear customers are looking for ways to better manage their finances in the current environment.
“An offset account is a transaction account linked to an eligible home loan or investment home loan that can help borrowers to pay less interest over the life of their loan and reduce the time it takes for them to pay their home loan off,” he said.
Borrowers with a $500,000, 30-year home loan with an interest rate of 4.50 per cent p.a. who have a starting offset balance of $10,000 and add a further $100 deposit to their offset every month, could save in excess of $60,000 over the life of their loan.
“At Commonwealth Bank, we offer eligible home loan customers the option to take advantage of multiple free offset accounts, which is perfect for those people who like to give their money a specific task and then set it aside into different accounts to ensure it is only used for its designed purpose. Eligible customers can also take advantage of our redraw facility, which can help them to pay less interest on their loan,” Dr Baumann said.
One such customer who has been taking advantage of the multiple offset accounts offered by the bank is Marisa Cregan. The mother of two utilises 10 offset accounts that are connected to her Commonwealth Bank home loan.
According to Ms Cregan, the 10 offset accounts – all of which work together to offset the interest charged on her home loan – helps her to bucket her money and ensure she keeps track of her finances.
