Offset account/Mortgage offset

An offset account/mortgage offset is a separate bank account linked to your home loan. Its main purpose is to reduce interest on the loan by offsetting the interest you earn on your savings against the interest charged on your mortgage. It can also earn you tax savings by offsetting taxable income against the interest paid on the loan. Some banks also allow you to link multiple offset accounts, so you can draw funds from several sources. Savings accounts are commonly used as offsets, but most banks also allow business and cheque accounts to be linked.