The proportion of customers with an offset account has grown by just under 10%, while total account balances increased by a similar amount over the 12 months to July 2022, new data from Commonwealth Bank showed.
Michael Baumann, CBA’s executive general manager home buying, said while some of the growth in offset accounts could be attributed to certain seasonality factors, it was also clear customers are looking for ways to better manage their finances in the current environment.
“An offset account is a transaction account linked to an eligible home loan or investment home loan that can help borrowers to pay less interest over the life of their loan and reduce the time it takes for them to pay their home loan off,” Baumann said.
Borrowers with a $500,000, 30-year home loan with an interest rate of 4.5% p.a. who have a starting offset balance of $10,000 and add a further $100 deposit to their offset every month, could save in excess of $60,000 over the life of their loan.
“At Commonwealth Bank, we offer eligible home loan customers the option to take advantage of multiple free offset accounts, which is perfect for those people who like to give their money a specific task and then set it aside into different accounts to ensure it is only used for its designed purpose,” Baumann said. “Eligible customers can also take advantage of our redraw facility, which can help them to pay less interest on their loan.”
In addition to using offset accounts, Baumann said the bank has a range of other flexible home loan tools and features that could help customers manage their mortgages.
“Customers can utilise our home loan repayments calculator tool to understand how any rate changes may impact their repayments,” he said. “Further, through NetBank and our industry-leading app, eligible customers with a variable rate loan can apply to split their home loan at any time. This can give them the certainty of a fixed rate and the flexibility and features of a variable rate, including access to multiple offset accounts on eligible home loans. Another tool available to our customers is the Home Loan Change Repayments tool. This is a new feature in the CommBank app that gives eligible customers with weekly or fortnightly home loan repayments the control to sync their repayments with the frequency and day of the week they receive their salary.”
