Watchdog investigates banks over costly mortgage practices
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If you’re one of the millions of Aussies with a mortgage, you probably know the feeling: you work hard, you save diligently, and you trust your bank to do the right thing—especially when it comes to those all-important offset accounts.
But what if the savings you’re counting on aren’t actually being passed on? That’s the question Australia’s financial watchdog is now asking, and the answers could have a big impact on your hip pocket.
For those new to the concept, an offset account is a transaction account linked to your home loan.
The money you keep in this account is ‘offset’ daily against your mortgage balance, reducing the interest you pay.
Used properly, offset accounts can save borrowers thousands of dollars a year—money that’s better in your pocket than the bank’s!
With more than 3 million Australian households holding a mortgage, and over half of those featuring an offset account, it’s no small matter.
In fact, there’s a whopping $300 billion currently sitting in offset accounts across the country.
But here’s where things get a bit murky. The Australian Securities and Investments Commission (ASIC) has launched a probe into whether banks are actually delivering the savings they promise.
According to ASIC commissioner Kate O’Rourke, there have been reports that some banks haven’t properly linked offset accounts to their customers’ mortgages.
In plain English: your hard-earned savings might not be reducing your interest bill at all.
'We’ve heard, in some instances, the banks have not connected the offset account to someone’s mortgage account,' O’Rourke said.
'That’s bad for the consumer, but we’re not sure how widespread that problem is.'
ASIC isn’t taking this lightly. They’ve kicked off a surveillance program targeting eight banks—including some of the big four—to get to the bottom of the issue.
If they find that customers have been short-changed, refunds could be on the way.
'Our expectation is that when things have not been properly done, consumers are remediated,' O’Rourke said.
But don’t expect answers overnight. The investigation could take up to a year to determine just how many people have been affected and how much money is at stake.
For many in the Seniors Discount Club community, managing finances in retirement is all about making every dollar count.
Offset accounts are a popular tool for reducing mortgage costs and freeing up cash for the things you love—whether that’s travel, spoiling the grandkids, or simply enjoying a more comfortable lifestyle.
If banks aren’t playing fair, it’s not just a technical glitch—it’s money out of your pocket.
This isn’t the first time banks have come under fire for not passing on savings or for making errors that cost customers.
From slow interest rate cuts to sneaky fees, it pays to keep a close eye on your accounts and to question anything that doesn’t look right.
Have you ever had trouble with your offset account, or do you suspect you haven’t been getting the savings you deserve? Maybe you’ve caught a bank error before? We’d love to hear your stories and tips—share your experiences in the comments below.
Read more: NAB reveals new interest rates for account owners. This is what your savings might look like soon
But what if the savings you’re counting on aren’t actually being passed on? That’s the question Australia’s financial watchdog is now asking, and the answers could have a big impact on your hip pocket.
For those new to the concept, an offset account is a transaction account linked to your home loan.
The money you keep in this account is ‘offset’ daily against your mortgage balance, reducing the interest you pay.
ASIC is investigating banks over concerns that mortgage offset accounts aren’t being properly linked, costing customers interest savings. Credit: Vecteezy
Used properly, offset accounts can save borrowers thousands of dollars a year—money that’s better in your pocket than the bank’s!
With more than 3 million Australian households holding a mortgage, and over half of those featuring an offset account, it’s no small matter.
In fact, there’s a whopping $300 billion currently sitting in offset accounts across the country.
But here’s where things get a bit murky. The Australian Securities and Investments Commission (ASIC) has launched a probe into whether banks are actually delivering the savings they promise.
According to ASIC commissioner Kate O’Rourke, there have been reports that some banks haven’t properly linked offset accounts to their customers’ mortgages.
In plain English: your hard-earned savings might not be reducing your interest bill at all.
'We’ve heard, in some instances, the banks have not connected the offset account to someone’s mortgage account,' O’Rourke said.
'That’s bad for the consumer, but we’re not sure how widespread that problem is.'
ASIC isn’t taking this lightly. They’ve kicked off a surveillance program targeting eight banks—including some of the big four—to get to the bottom of the issue.
If they find that customers have been short-changed, refunds could be on the way.
'Our expectation is that when things have not been properly done, consumers are remediated,' O’Rourke said.
But don’t expect answers overnight. The investigation could take up to a year to determine just how many people have been affected and how much money is at stake.
For many in the Seniors Discount Club community, managing finances in retirement is all about making every dollar count.
Offset accounts are a popular tool for reducing mortgage costs and freeing up cash for the things you love—whether that’s travel, spoiling the grandkids, or simply enjoying a more comfortable lifestyle.
This isn’t the first time banks have come under fire for not passing on savings or for making errors that cost customers.
From slow interest rate cuts to sneaky fees, it pays to keep a close eye on your accounts and to question anything that doesn’t look right.
Read more: NAB reveals new interest rates for account owners. This is what your savings might look like soon
