By Josh Bartlett, Mynt Financial
Everyone’s chasing a lower rate at the moment, and I get it, rates are the headline number people fixate on. But here’s something we see constantly in our reviews that’s costing people real money, quietly, every single year: savings that aren’t sitting in an offset account.
It sounds like a small admin detail. It isn’t.
The Number That Should Get Your Attention
If you’ve got $30,000 sitting in a regular savings account instead of your home loan’s offset, that’s costing you close to $2,000 a year in extra interest.
To put that in perspective: on a $500,000 loan, that’s roughly the same benefit as negotiating your rate down by 0.40%. People will spend hours comparing lenders and haggling over a 0.10% rate difference, then leave $30k sitting in the wrong account and lose four times that value without even noticing.
And I know not everyone has $30,000 spare right now, cost of living is real and I’m not pretending otherwise. But this comes up far more often than you’d think, even with smaller amounts. The principle scales down too: $10,000 in the wrong place is still costing you real money every year.
Two Questions Worth Five Minutes of Your Time
1. Do you actually have an offset account, or just a normal savings account?
These get confused constantly, and the two are not the same thing. A genuine offset account is linked directly to your home loan, and the balance in it reduces the interest you’re charged, dollar for dollar, without you having to do anything. A regular savings account, even a high-interest one, does not do this. It earns you interest (which is taxed), rather than saving you interest (which isn’t).
2. If you do have one, is everything that should be sitting in it actually sitting in it?
This is the one that catches people out most. We regularly review clients who have an offset account set up, correctly linked, doing its job… and then find $15,000, $20,000, sometimes more, sitting in a completely separate savings account earning 4-5% interest, fully taxable, instead of offsetting a home loan rate of 6%+. It’s not that people are doing anything wrong on purpose, it’s usually just old habits: a savings account they opened years ago and never consolidated.
Why This Keeps Happening
A few common reasons we see:
- The offset was opened, but people kept their “everyday” savings habits separate, treating it like just another account rather than the main place their spare cash should sit.
- Emergency funds get parked in a “safe” separate savings account out of habit, when the offset is usually the better home for it (still accessible, but working for you every single day it sits there).
- People assume a “high interest savings account” is doing the same job. It isn’t. The interest you earn there gets taxed at your marginal rate. The interest you save via an offset does not, because you’re not earning income, you’re avoiding an expense.
What To Actually Do About It
This isn’t complicated to fix, it’s just easy to overlook:
- Check that your offset is actually linked to your home loan, not just an account that sits alongside it. If you’re not 100% sure, ask your lender or ask us, it takes two minutes to confirm.
- Consolidate your spare cash. If you’ve got savings, an emergency fund, or cash sitting idle across two or three accounts, work out how much genuinely needs instant, no-questions-asked access, and move everything else into the offset.
- Keep contributing to it like you would a savings account. The habit of “saving” doesn’t need to change, just where it lands.
The Bottom Line
Chasing a better rate is worth doing, and if it’s been a while since your loan was reviewed, that conversation is still worth having. But before you spend energy shopping around for a 0.10-0.20% improvement, check whether you’re already sitting on a bigger win that’s simpler to fix: making sure every dollar of your savings is actually working against your loan, not just sitting next to it.
If you’re not sure whether your offset is set up properly, or where your savings should actually be sitting, send me a message. It’s a five-minute check that could be worth thousands a year.
Josh
Give me a call or send a message. Let’s see if you are with the right lender, right structure and most suitable rate for your circumstances.
Disclaimer: Before making any financial decisions, we recommend seeking personalised advice from a qualified mortgage broker who can assess your individual circumstances and help you explore the options available to you.
Josh Bartlett
Director – Mynt Financial
