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New Westpac feature to help customers get ahead on their home loan
17 February 2025
Westpac is introducing the option for home loan customers to set up multiple offset accounts with no additional fee, providing more choice and control in how they manage their finances.
The move comes as Westpac has recorded a 37 per cent increase in offset accounts opened over the past five years, as well as a 63 per cent increase in offset account balances over the same period.
New Westpac research has found 71 per cent of Australians who have an offset account with their mortgage use it to reduce their home loan. For example, with an offset account balance of $10,000 and a further $100 deposit added every month, a customer can save more than $110,000 in interest on a 30-year home loan of $500,000. This would also reduce the loan term by nearly three years+.
“With interest rates top of mind for Australians, we know many customers are thinking about how to get ahead on their home loan,” said Westpac Managing Director of Mortgages, Damien MacRae.
“An offset account is an everyday bank account linked to your home loan, where every dollar in your account reduces, or offsets, the interest you pay.
“We’ve seen a steady increase in customers building up their offset balances. We will be rolling out the option for customers to set up to 10 offset accounts to offer greater flexibility in how they manage their savings, while reducing the interest charged on their home loan.
“Multiple offset accounts give you the flexibility to ‘bucket’ finances for different purposes. An example of this could be setting aside money in separate offset accounts for everyday living expenses, a holiday or emergency funds.
“This can offer benefits such as more visibility and control over how you allocate your money, manage your cash flow and track spending.
“Multi-offset accounts can also allow customers the flexibility to open a home loan with family or friends and still reduce their interest payments while keeping their broader finances separate,” said Mr MacRae.
The introduction of multiple offset accounts is part of Westpac’s business and technology simplification program UNITE, simplifying Westpac’s products by delivering consistent features to all customers. Multiple offset accounts are already available to St.George, Bank of Melbourne and BankSA customers.
The new feature is available for lenders and brokers to request on behalf of eligible customers from today. From March, customers with an eligible home loan will be able to manage their offset accounts online by searching ‘offsets’ in the Westpac app and selecting ‘manage offset accounts’. Alternatively, they will be able to visit any branch or call Westpac to set up their accounts.
Westpac offers a range of tools to help customers manage their mortgage and personal finances. This includes a Budget Planning tool available in the Westpac App to help customers track their finances and Westpac’s home loan offset calculator where they can explore how much they could save on home loan interest and term.
Westpac research on how Australians use offset accounts also found:
- 44 per cent use it to pay off their home loan sooner
- 38 per cent use it because it is flexible
- 25 per cent use it to improve their cash flow management.
Tips for paying off your home loan sooner:
- Extra repayments: The simplest way to reduce your home loan is making additional repayments to those you’re obliged to make (or retaining your current repayments if interest rates were to go down).
- Repayment type: Choosing the right repayment type is important. With principal and interest, both parts of a home loan are paid off (the principal loan amount plus interest). With interest-only, only interest charges are repaid without reducing the principal loan amount.
- Repayment frequency: The more you make repayments, the sooner your home loan can be repaid. Choosing fortnightly repayments when you apply for a home loan will allow you to make the equivalent of one extra repayment per year, given there are 26 fortnights in a year.
About Westpac Research
The research was commissioned by Westpac and conducted by Lonergan Research in accordance with the ISO 20252 standard. Lonergan Research surveyed 2,000 Australians aged 18+ with surveys distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted online amongst members of a permission-based panel, between 4 – 15 January 2024. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.
+$500,000 with an offset account balance of $10,000 over the life of a 30-year owner-occupier loan at interest rate of 6.43% p.a., with $100 monthly account deposits. This is an estimate of the potential offset savings based on the information provided: actual savings may differ depending on a customer’s situation. Changes in interest rate will affect the calculation. Our lending criteria, and basis upon which we assess what a customer can afford, may also change at any time without notice.
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