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Home owners are using the savings they’ve been accumulating during COVID-19 to increase the amount in their offset accounts. With travel and outings off the card for many, savvy savers are reducing the amount of interest they pay on their home loan by topping up their account.

Not only is this a great way to save for a rainy day, it also helps save money on your mortgage in the long run.

We’ve answered a few of the common questions we get asked to help you understand how offset accounts work and provide tips on what you can do to maximise your savings.

What is an offset account?

An offset account is a great home loan feature that can help you save on interest. An offset account is a transactional account linked to your home loan. For example, with a Variable Home Loan, you are able to deposit funds into this account and it will reduce the balance of your loan that interest is calculated on thus saving you interest. If for some reason you need to access these funds for other expenses, you can still withdraw the money.

What’s the easiest way to make the most of my offset account?

The more savings you have in your offset account, the more you’ll be able to reduce your home loan interest. The easiest way to boost your savings without lifting a finger is to have your wage deposited into your offset account. If you receive a lump sum payment or mid-year bonus, pop it straight into your offset account to boost the balance.

How can I maximise my offset account?

Using a credit card with an interest free period for your monthly expenses can be a useful tool to help keep money in your offset account longer. Instead of paying with cash, use your credit card to make purchases during the month and let your money work for you in your offset account by reducing the interest you pay on your home loan.

Make sure you choose a no or low fee credit card option and clear the balances on the card once a month by the due date to avoid any interest being charged (cash advances excluded). 

To learn more about bcu’s credit card products, visit our credit cards page

To find out more about our home loan products, visit our home loans page or talk to one of our friendly team on 1300 228 228.

Important information

Information on this website is general and has been prepared without taking into account your objectives, financial situation or needs. You should consider whether this information is suitable for your objectives, financial situation and needs before acting on the information provided.