An offset account is one of the most powerful tools available to home loan borrowers—but most people aren’t using it to its full potential.
Used wisely, an offset account can reduce the interest you pay, help you pay off your loan faster, and give you flexibility with your money along the way.
First, What’s an Offset Account?
Read our article on: Redraw vs Offset Account
How to Use Your Offset Account Like a Pro
Ready to get serious about using your offset account strategically? Here are our top tips:
1. Deposit Your Salary into Your Offset
Have your income paid directly into your offset account. Every day that money sits there, whether it’s for a few days or a few weeks, it’s helping reduce interest on your home loan.
Pro tip: Even if the money is going to be spent soon, you still benefit from daily interest savings while it’s sitting there. (Commonly, interest is calculated daily and charged monthly)
2. Use a Credit Card for Everyday Spending
Use a credit card with up to 55 days interest-free for your everyday purchases. This delays when money leaves your offset account—keeping your cash working harder for longer.
Just make sure:
- You pay your credit card in full each month.
- You don’t overspend or rely on credit.
Disclaimer:
The information in this blog is general in nature and does not take into account your personal financial situation, needs or objectives. You should consider whether the information is appropriate for your circumstances and seek personalised advice before making any financial decisions. Zodiac Finance does not recommend using credit cards in a way that may lead to unmanageable debt or financial hardship.
3. Keep Savings in Your Offset (Not a Savings Account)
With interest on savings accounts often much lower than the interest on home loans, your money will usually save you more in an offset than it will earn in a savings account.
Example:
Saving $10,000 in an account earning 4% might earn you $400/year.
But offsetting a 6% mortgage with that same $10,000 could save $600/year.
4. Minimise Separate Accounts
The more accounts you spread your money across, the less impact your offset will have. Consider consolidating your savings and spending accounts into a single offset account (or multiple offset accounts if your lender allows).
5. Maintain a Buffer
It’s a good idea to keep a comfortable buffer in your offset to cover emergencies or unexpected expenses. That way, your money stays accessible—but is still reducing your interest payable.
6. Review Regularly
Check in every few months to see:
- How much you’re saving in interest
- If your spending habits are reducing your offset balance too much
- Whether your current loan structure still suits your lifestyle
At Zodiac Finance, we can help you review this and make sure you’re getting the best out of your setup.
Common Offset Mistakes to Avoid
- Only using the offset for spending, not for savings
- Keeping large amounts in a separate savings account
- Forgetting to link the offset account properly to your home loan
- Not tracking your spending, which can erode your offset balance
Final Thoughts
An offset account can be an incredibly smart way to reduce interest, build equity, and pay off your mortgage faster—without changing your lifestyle.
The trick is to be intentional with how you use it. With the right habits, you’ll be saving interest every single day, often without even noticing.
Need Help Setting Up or Reviewing Your Offset Strategy?
At Zodiac Finance, we’ll help you understand how to use features like offset accounts to your advantage—and make sure your loan is working as hard as you are.
Reach out today for a free review or personalised lending strategy. Whether you’re buying, refinancing, or just want to get more out of your loan, we’re here to help.