What is an Offset Account?
An Everyday Offset Account is a transaction account linked to your eligible variable rate home loan (such as our Standard Variable Rate, Simple Home Loan, or Digi Home Loan) or investment home loan. The money you keep in this account offsets your loan balance, meaning you pay interest only on the difference.
How it works: Let’s say you have a loan balance of $300,000 and $50,000 in your Everyday Offset Account ; you’ll only pay interest on $250,000 of the loan balance. The higher the balance in your offset account, the more interest you can save on your home loan..
How can you use offset?
An Everyday Offset Account functions just like a regular transaction account, you can deposit your salary, pay bills, and access your money whenever you need it. But here’s the difference: every dollar in your Everyday Offset Account up to the balance of the home loan reduces the interest charged on your home loan, calculated daily. That means you save on interest while keeping your funds fully accessible.
Did you know? Some CommBank home loans allow multiple Everyday Offset Accounts, so you can organise your money into different buckets —one for bills, one for savings, and so on — all helping to reduce interest paid on you loan.
What is a Redraw Facility?
Redraw allows you to access additional payments that you’ve made on your home loan. For weekly and fortnightly direct debit payers, only funds over and above the minimum required repayments will be available.
How it works: If your minimum monthly repayment is $2,000 and you pay $2,500, the additional $500 goes towards reducing your loan balance. Over time, these additional repayments can be redrawn — subject to your loan’s terms.
Important to note: The money in your redraw account may reduce over the life of your loan so that, by the end of your agreed loan term, both your loan balance and the available redraw will be zero.
For CommBank home loans, adjustments to your available redraw will occur on your monthly repayment date.