The Hidden Mortgage Mistake Costing Aussies Thousands

A recent revelation has exposed a costly oversight quietly draining the savings of thousands of Australian homeowners — and it’s something many people don’t even realise they’re doing wrong.

According to new research from Money.com.au, 57% of mortgage holders have never checked whether their offset account is correctly linked to their home loan. This simple mistake could be costing homeowners tens of thousands of dollars in unnecessary interest payments over the life of their mortgage!

What’s an Offset Account — and Why It Matters

An offset account is one of the smartest tools available to help you save on your mortgage. When linked correctly, every dollar sitting in your offset account reduces the balance your lender uses to calculate interest.

For example, if you have a $600,000 mortgage and $30,000 in your offset account, you’ll only be charged interest on $570,000 — saving you thousands over time.

But here’s the catch: if your offset account isn’t linked properly, those savings disappear. You’ll still be paying interest on the full loan amount, effectively throwing money away every month.

Real-Life Shock: $340,000 in Savings Lost

Money.com.au’s mortgage expert, Debbie Hays, shared a jaw-dropping example:

“One homeowner deposited $340,000 from an inheritance into what they thought was their offset account. A year later, they discovered it wasn’t linked to their home loan at all — meaning they’d saved nothing on interest.”

Mistakes like this can happen due to banking errors, account changes during refinancing, or simple oversight. But the impact can be massive.

The Cost of an Unlinked Offset

Let’s put it into perspective:
A borrower with a $600,000 loan at 5.5% interest and $30,000 in their offset could end up paying an extra $111,620 in interest over 30 years — and remain in debt for nearly three extra years — if their account isn’t linked.

Who’s Most at Risk?

The research found that 1 in 10 homeowners assume their lender will automatically link their offset account, which isn’t always the case.
Only 25% of borrowers have confirmed their offset is correctly linked, while 9% discovered errors they had to fix.

Generationally, Baby Boomers were the least likely to check — with 69% admitting they’ve never confirmed their account link. That’s compared to:

• 58% of Gen Z

• 50% of Gen X

• 47% of Millennials

For older Australians who’ve been paying off mortgages for decades, that’s potentially years of lost savings.

How to Check If Your Offset Is Linked

If you’ve got an offset account, it’s worth taking five minutes to make sure everything’s working as it should.
Here’s how to check:
✅ Log in to your online banking and look for an offset adjustment or similar line on your loan statement.
✅ If you’re unsure, call your lender directly and ask for confirmation.
✅ If it’s not linked, request that it be backdated to your loan settlement date — especially if it was the lender’s error.

In some cases, borrowers have even been refunded for extra interest charged when the lender was at fault.

A Timely Reminder for Homeowners

The Australian Financial Complaints Authority (AFCA) is currently investigating possible offset-account mislinking across several major lenders — proving this issue is far more widespread than most realise.

With interest rates fluctuating and household budgets under pressure, making sure your mortgage and offset account are correctly set up could be one of the simplest ways to save serious money — without changing your loan or refinancing.

At the end of the day, every dollar you save in interest is a dollar you can keep for your future, your family, or your next property move.

Tip from First National Real Estate Bundaberg:
If you’re not sure how your mortgage is structured — or if your offset account is working for you — reach out to your lender or mortgage broker for a quick check. It could be one of the easiest financial wins you’ll ever make!