Broker Codex

How to check your offset is actually saving you money

By Broker Codex Editorial

Australia's corporate regulator has confirmed that a large number of home loan offset accounts were not set up or linked correctly, and many borrowers had no idea. The good news is that the problem is easy to check and quick to fix once you know what to look for. This article explains what ASIC found, why these errors stay hidden, and the practical steps a borrower or their mortgage broker can take to confirm an offset account is doing its job.

What did ASIC find about offset accounts?

On 29 July 2026, the Australian Securities and Investments Commission (ASIC) released the findings of a review into how banks manage mortgage offset accounts (media release 26-173MR). ASIC reviewed eight banks that together represent more than 70% of Australia's $2.5 trillion home loan market, and examined 204,000 unique home loans settled between 1 March and 31 August 2025.

The review found that offset accounts frequently failed to work as customers expected. Banks have paid more than $55 million in customer compensation for offset account failures identified over the period from 1 September 2023 to 31 August 2025.

The failures fell into a few clear categories. According to ASIC, 55% of cases involved an offset account that was opened but never linked to the loan, 22% involved an offset account that was never opened at all, 14% involved an account that was linked outside the timeframes communicated to the customer, and the remaining 9% were other types of failure.

The eight banks named in the review were AMP Bank, Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia, Credit Union Australia, HSBC Bank Australia, ING Bank (Australia), Macquarie, and Westpac.

Why do offset account errors stay hidden?

An offset account reduces the interest charged on a home loan by offsetting the account balance against the loan balance. If the account is not linked correctly, the borrower still makes the same monthly repayment, so nothing looks wrong on a statement. The cost shows up quietly as extra interest and a longer loan term.

ASIC Chair Sarah Court described the problem this way: "When offset accounts don't operate correctly, the harm can be hidden. Loan repayments stay the same, while customers unknowingly pay more interest and take longer to repay their loan."

That hidden quality is what makes a periodic check worthwhile. A borrower can hold money in what they believe is an offset account for years without ever seeing a warning that it is not connected to the loan.

How much money is riding on getting this right?

Offset accounts are now a mainstream feature of Australian home loans. ASIC reported that $349.1 billion was held in offset accounts as of March 2026. For an individual borrower, the effect of a correctly working offset compounds over the life of a loan, because every dollar sitting in the linked account reduces the interest charged each day.

The scale of the balances involved is exactly why a small setup error can translate into a meaningful amount of lost interest savings over time. That is the case for treating an offset account as something to verify rather than assume.

How can a borrower check an offset account is working?

Checking an offset account does not require a financial adviser. Most of it can be done through online banking or a short call to the lender. The key steps are:

  1. Confirm the offset account actually exists and appears in online or mobile banking.

  2. Confirm it is linked to the correct home loan, not sitting as a standalone transaction account.

  3. Confirm the interest charged on the loan reflects the offset balance. If the account holds a balance but the interest charged looks the same as it would with no offset, that is a signal to ask the lender.

  4. Ask the lender to confirm in writing when the offset was linked and whether it has been active the entire time.

If anything looks off, borrowers can raise it directly with their bank and ask about compensation for any period the offset was not working. Banks have already remediated many cases, and ASIC has made clear it expects lenders to identify and fix these failures.

What role does a mortgage broker play?

A mortgage broker sits between the borrower and the lender at the point where an offset account is set up, which is often where these errors begin. A broker can confirm at settlement that the offset is opened and linked, rather than leaving it as an assumption. For existing loans, a broker can review the structure during a regular loan health check and flag an account that is not offsetting.

For borrowers comparing lenders, a broker can also explain how each lender handles offset accounts, since features and setup processes differ. This is the kind of practical, ongoing oversight that a directory of verified brokers is designed to help borrowers find.

Frequently asked questions

Does an offset account failure mean I was overcharged? Not necessarily overcharged against your contract, but you may have paid more interest than you would have if the offset had been working. If the account was meant to be offsetting and was not, ask your lender to review the period and confirm any compensation.

Will my repayments show that something is wrong? Usually not. Repayments generally stay the same whether or not the offset is linked, which is why the issue is easy to miss. The effect appears as extra interest and a longer term, not a changed repayment.

Which banks were part of the ASIC review? AMP Bank, ANZ, Commonwealth Bank, Credit Union Australia, HSBC Australia, ING, Macquarie, and Westpac. These eight represent more than 70% of the home loan market, though offset setup errors are not unique to any single lender.

What should I do first? Log in to your banking, confirm the offset account exists and is linked to your loan, and check whether the interest charged reflects the balance you hold. If you are unsure, ask your lender or your broker to confirm it for you.

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