An offset account only saves you money if it’s actually connected to your home loan. That sounds obvious, but in July 2026 ASIC found that banks had been getting it wrong often enough to pay out more than $55 million in compensation to affected customers.
If you have an offset account, it takes two minutes to check yours. Here’s what ASIC found, when the link is most likely to break, and exactly where to look.
What ASIC found
ASIC’s report Offsets, out of mind (REP 837) reviewed eight banks that together hold more than 70% of Australian home loans: AMP Bank, ANZ, Commonwealth Bank, Credit Union Australia (now Great Southern Bank), HSBC, ING, Macquarie and Westpac. It looked at data on 204,000 home loans settled between March and August 2025.
Of the offset failures the banks reported:
| What went wrong | Share of failures |
|---|---|
| Offset account opened, but never linked to the loan | 55% |
| Offset account never opened at all | 22% |
| Linked later than the customer was told | 14% |
| Other problems | 9% |
The main cause was manual error by bank staff, behind 86% of failures. Seven of the eight banks still process offset changes during the life of the loan by hand.
The banks’ industry body says only a few hundred of the loans reviewed had problems. That’s reassuring, but it doesn’t help you if yours is one of them, and nothing tells you when it happens. Your repayments look exactly the same. You just pay more interest than you should.
What an unlinked offset costs you
Say you owe $600,000 and keep $50,000 in your offset account. At an interest rate of 6% (used here for illustration):
- Linked: you’re charged interest on $550,000.
- Not linked: you’re charged interest on the full $600,000. That’s about $3,000 extra a year, roughly $250 a month.
ASIC’s own example found that an unlinked offset left undetected for the life of a loan could cost nearly $230,000 in lost interest savings and add four years to the loan.
When the link is most likely to break
From our experience as brokers, and from ASIC’s findings, these are the moments to check:
- Right after settlement. The offset is often set up as a separate request, and it’s easy for it to fall through the cracks.
- After you refinance. A new loan means a new account number, and the offset has to be linked again.
- When a fixed rate ends. Many fixed loans don’t allow a full offset. When the loan rolls to variable, the link may need to be set up.
- When you switch products or split your loan with the same bank.
- When you open a new offset account, for example a second one for savings.
One case in ASIC’s report shows how this happens. Two borrowers paid more than $17,000 in extra interest after a refinance because the bank’s settlement team never told their broker the offset needed to be re-linked. Nobody was watching that step.
That’s why, on every loan we settle or refinance, we confirm with the lender that the offset is linked. We’d still recommend checking your first statement yourself. It takes two minutes, and the steps are below.
How to check yours in two minutes
In your banking app or internet banking
- Open your home loan account, not the offset account itself.
- Look for a section called Offset, Linked accounts, Manage or Account details.
- Check that it lists your offset account’s BSB and account number.
On your home loan statement
Look near the loan details or the interest calculation. Most lenders show the linked offset account and the balance that was offset.
The sanity check
Take your loan balance, subtract your offset balance, and multiply by your interest rate ÷ 12. That’s roughly what your monthly interest charge should be. If the charge on your statement is noticeably higher, call your lender.
If it isn’t linked: ask your lender to link it, and ask in writing for a refund of the extra interest back to the date it should have been linked. ASIC expects banks to fix these errors and compensate customers promptly. If they won’t, you can complain to the Australian Financial Complaints Authority (AFCA).
Is an offset account right for you?
An offset is worth it when you keep a meaningful balance in it, such as savings, an emergency fund or business cash flow. If your balance is usually small, the package fee that often comes with an offset can cost more than it saves. A basic loan with redraw may suit you better.
For self-employed borrowers, an offset can be especially useful. Money set aside for tax and BAS can sit against your loan until it’s due, reducing interest in the meantime. Just keep track of what’s actually yours to spend.
Want us to check it for you?
Send us your latest home loan statement and we’ll confirm whether your offset is linked and working. If your loan is more than a couple of years old, we’ll also tell you how your rate compares. Call (07) 5538 8334 or book a time with Joe.
Source: ASIC, REP 837 Offsets, out of mind: Banks fall short on mortgage offset account promises, July 2026 (PDF); ASIC media release 26-173MR.
This article is general information only and does not take into account your objectives, financial situation or needs. The interest example is illustrative and uses an assumed rate. Fast Funding (Australian Credit Representative Number 397509) is a Corporate Representative of BLSSA Pty Ltd (Australian Credit Licence 391237).
