Your offset account may be open without doing the job you expect

Seeing money in an account labelled “offset” does not tell you whether it is reducing the interest charged on your loan.

Moneysmart's guidance, updated in July 2026, warns borrowers to check that the account is correctly linked. It says an ASIC review found problems with some banks' management of offset accounts, and that a faulty link can leave borrowers paying more interest without an obvious change to their scheduled repayments. [1]

That warning is a reason to inspect your own arrangement. It is not evidence that your particular bank has made an error.

Understand what the balance is meant to do

An offset is a transaction account linked to a mortgage. Its balance reduces the loan amount on which interest is calculated. Moneysmart distinguishes this from redraw: extra repayments go into the loan itself, and access to those repayments depends on the loan terms. [1]

The words are often used together when comparing products. They describe different arrangements, so check which one you have and how access works.

You should not need to infer the arrangement from an advertising headline. Ask your lender to identify the linked loan and explain how the offset balance is included in its interest calculation.

Ask for evidence you can understand

Start with the bank's app, online banking or statements. If these do not show the link or the effect clearly, ask the bank to explain it for a specific statement period.

A useful question might be: which account was linked to this loan during that period, and where can I see that balance reflected in the interest calculation? Record the response and the date.

Avoid drawing a conclusion from one daily balance. The figures you are comparing need to cover the same period and account for any transactions or rate changes. If the explanation is unclear, ask for it in writing before assuming you can reconstruct the full calculation yourself.

Recheck after a change

Moneysmart says refinancing or switching loan products can break an offset link and that relinking may be necessary. [1] Include the account check in your post-change administration, alongside reviewing repayment and direct-debit arrangements.

Consider a hypothetical borrower who has kept the same everyday account while changing home-loan products. They may reasonably expect everything to carry across. A confirmation of the account linkage would settle that specific question.

The article cannot establish whether a particular product change requires relinking. Your lender's records and terms are the relevant evidence.

Compare the whole cost

Moneysmart's home-loan comparison guidance asks borrowers to consider the interest rate, fees and features, including offset and redraw facilities. It also explains why comparing loan costs takes more than choosing an attractive headline rate. [2]

For your own comparison, write down the cost of the feature and the balance you realistically expect to maintain. A temporary balance after receiving a lump sum may not represent your usual position.

Do not move money or change loans solely on the basis of this article. It is general financial information, not a recommendation tailored to your circumstances.

If an account appears to be incorrectly linked, contact the bank promptly with the dates and records you have checked. Ask what it will investigate and how it will report the result. That gives you a specific issue to follow up rather than an unanswered worry about the entire mortgage.