Offset accounts surge as homeowners race to beat higher rates

Who wouldn’t want to save on home loan interest and pay off their mortgage faster? Homeowners are increasingly turning to offset accounts to do just that. So today we’ll look into whether an offset account could benefit you.

The recent RBA cash rate hike has led homeowners to embrace a variety of strategies to ease the rate pain, and it turns out one of the most popular options is a home loan offset account.

One of the big 4 banks, NAB, says it is seeing “offset accounts surge” as homeowners, especially younger borrowers, look for low‑effort ways to beat rising rates.

According to NAB, three-quarters of its home loan customers now use an offset account.

While homeowners aged 40 to 60 remain the biggest users of offset accounts, NAB says that among customers aged under 35, the number of offset accounts linked to new home loans has nearly doubled compared to last year.

Let’s dive in to understand the appeal of offsets, the potential savings to be made, and who home loan offset accounts may be suited to.

How an offset account can save on loan interest

A bit of background first.

An offset account is an everyday account linked to your home loan.

You don’t earn interest on money in the offset account. Instead, you save by paying less interest on your home loan.

That’s because the balance of the offset account is deducted from (or ‘offset’ against) the value of your home loan when loan interest is calculated.

For example, if you have a $500,000 mortgage balance and $20,000 in an offset account, you’ll only be charged interest on $480,000.

Your monthly home loan repayment amount will stay the same – it’s just that more of your monthly repayment will go towards paying off the principal, rather than towards interest.

When this pattern is repeated month after month, the savings can potentially start to stack up.

Over time the balance of your home loan may be paid off quicker, which further helps to lower the monthly interest charge.

In this way, an offset account has the potential to be a way to pay off your loan sooner.

How much could I save with an offset account?

The interest savings generated by an offset account will depend on the size of your home loan, the balance of the offset account, and your loan rate.

Here’s an example of the possible savings that we’ve put together using one bank’s offset calculator (most banks have them readily accessible online, just google ‘offset account calculator’).

Let’s say you have a $500,000 mortgage with a 30-year term and an interest rate of 5.99% (comparison rate of 6.37%), plus $20,000 always sitting in your linked offset account.

Over the life of the loan, the impact of the offset account could cut $90,571 off your total interest bill and see you mortgage-free 2.5 years ahead of schedule.  

What matters is that you talk to us to know exactly how much you could save with an offset account.

Who is an offset account well-suited to?

There’s a lot to love about home loan offset accounts.

But they may not be the ideal option for every borrower.

The more you have in an offset account, the greater the savings on loan interest. So, you need to be able to resist the urge to dip into the account too often – especially as the funds are usually available at call.

One way around this is to look for a lender that offers multiple offset accounts linked to the same home loan. This way, you can use one offset account for everyday money, and the others to save for personal goals – all while saving on home loan interest.

The other aspect to consider is that offset home loans can come with higher rates and fees. If you have only limited cash savings, you may save more with a lower rate without features such as offset accounts.

Lastly, it’s always worth weighing up whether any money you allocate towards your offset account and paying off your home loan sooner could be better utilised by investing towards your future in other ways.

Refinancing – another way to save on interest

Offset accounts can be one interest savings hack. But you can’t simply add them to every home loan account – adding them can often mean refinancing.

Fortunately, you could potentially double up on cutting the amount of interest you’re paying by refinancing to a lower rate home loan at the same time.

If you’ve had your old loan for a while, it’s worth calling us to see if you could save by refinancing to a loan with a lower rate and/or features better-suited to your needs.

The main point is that you don’t have to just wear a higher interest rate.

Call us to find out if an offset account is a good fit for you – and other strategies that could potentially help you save on home loan interest.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How first home buyers can buy up to five years sooner

As home prices climb higher, first home buyers can feel like the goal posts are continually shifting further out of reach. But there is a way to potentially cut years off the time taken to buy a home.

Saving a first home deposit has never been easy – especially in the last decade or two.

And as property prices continue to head north, first home buyers can be left wondering if they’ll ever be able to save a 20% deposit.

But don’t give up on your dream of home ownership just yet.

We can help you explore opportunities that could get you into the market before prices potentially rise further.

A new report by Domain examines a potential solution that could bring your purchase forward by more than five years.

Home price growth is pushing out deposit timeframes

The past year has seen home values across the nation’s capitals rise by 9.9%, according to Cotality.

However, even this eye-watering increase doesn’t show the full picture.

According to Domain, in some places, the price of entry-level homes has climbed over 20% in the past 12 months – a rise it describes as “an extreme rate of price growth”.

Faced with this level of price rises, saving a deposit can be a real pain point for plenty of first home buyers.

Domain found the time taken to save a 20% deposit now ranges from 2 years and 7 months for an entry-priced unit in Darwin, to 7 years and 7 months for an entry-priced house in Sydney.

But here’s the catch.

While you’re working hard to grow a deposit, home prices are likely to keep rising.

Over the past five years, for example, Domain says the price of entry level homes has risen 68%.

Get started in the market up to 5 years earlier

The federal government’s 5% Deposit Scheme may be the solution that could help you bring forward your home buying plans.

The scheme lowers the minimum deposit needed to buy a home down to 5%, or even 2% for single parents – without the need to pay lenders mortgage insurance.

Eligible home buyers do face property price limits.

However, there are no caps on personal income, and no limit on the number of people who can apply for the 5% Deposit Scheme each year.

Domain crunched the numbers, finding that the 5% Deposit Scheme can help first home buyers looking to buy a house in Sydney get into the market 5 years and seven months earlier.

In Brisbane and Adelaide, the scheme can cut more than four years off the time taken to save a deposit.

In every other capital, the 5% Deposit Scheme can bring forward buying plans by more than three years.  

Is there a downside?

Saving a deposit is just one of the home buying requirements.

Lenders also want to be sure you can comfortably manage repaying your loan.

A potential drawback of buying with a small deposit is that you’ll likely need to borrow more, and this may mean higher loan repayments.

That’s why we encourage you to speak with us at an early stage for a clear idea of the likely repayments to budget for.  

Talk to us

Not surprisingly, the 5% Deposit Scheme is proving very popular, having already helped more than 240,000 Australians into home ownership.

Contact us to see if it could be the solution that helps you bring forward your home-buying plans.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How much do you need to earn to buy a home in 2026?

Sure, saving a deposit is important, but your income can hold the real key to getting into the market. That’s because it shapes your borrowing power.

It stands to reason that lenders will look closely at your personal income when you apply for a home loan.

It’s not just about you being able to comfortably handle loan repayments. Lenders also have a legal responsibility to be sure you’re not taking on too much debt.

The challenge for home buyers is that it can be unclear what sort of income you need to qualify for a home loan.

The reality is that there’s no one-size-fits-all number.

How much you need to earn to buy a home can hinge on where you plan to buy – and whether you plan to buy solo, or team up with a co-buyer.

Average income is over $100,000 – is it enough?

Across Australia, average weekly earnings for full-time employees are around $2,130. That adds up to an annual income of about $110,791.

These figures are based on May 2025 data, so chances are, the average is a little higher in early 2026.

Even so, the average full-time income may not always be enough for some home buyers to get into the market – especially if they choose to buy solo.

Income requirements vary between cities

Domain looked at how much buyers around Australia likely need to earn to get into the market, assuming a 20% deposit.

It found that a solo buyer in Sydney, the nation’s most expensive property market, may need to earn about $232,000 annually to buy a home. A couple buying in Sydney should each earn $121,000.

Melbourne buyers fare slightly better. A single person needs around $145,000 annually, while a couple each needs about $85,000.

In Brisbane, a single buyer should aim for $166,000, dropping to $94,000 for each person in a couple.

A solo buyer in Adelaide should earn about $143,000, or an income of $84,000 when coupled.

In Perth, where home prices have jumped 97% in the past five years, a single buyer should have an income of $147,000 to buy a home, falling to $86,000 for each person in a couple.

Buying solo in Hobart usually requires an annual income of around $118,000. For a couple, the income required is about $72,000 per person.

Darwin has the nation’s most affordable property. Reflecting this, a single buyer could potentially buy a home with an income of $111,000, or around $68,000 per person as a couple.

Finally, in the nation’s capital, solo buyers would need to earn about $151,000 to buy a place in Canberra, or $88,000 for each of a couple.

The solution could be flexibility – or government schemes

It’s important to point out that Domain’s analysis is based on buyers opting to buy a house, rather than an apartment.

This matters because houses typically cost more than apartments.

Bear in mind too, the income needs noted above assume a buyer pays the city’s median house price. You may be able to find a more affordable home, depending on where you’re looking to buy.

This highlights the value of being flexible about what and where you buy, especially if you’re a first home buyer.

Additionally, there are a number of government first home buyer schemes that could potentially help you buy sooner.

For instance, the federal government’s 5% Deposit Scheme lets first home buyers get started with a smaller deposit and zero lenders mortgage insurance. 

Property price caps apply – or another scheme might be more suitable for your situation – so feel free to reach out to have a chat about them.

Could you upsize your income? Talk to us first

A survey by Canstar found around one-in-two Australians expect a pay rise in the months ahead. If that’s you,  you may get a handy boost to your borrowing power.

However, if you’re thinking of raising a hand for overtime work, it’s worth noting that not all lenders include 100% of overtime pay in their income assessment. The same can apply to commissions and bonus payments.

That’s why it’s so important to speak to us – to get a clear idea of your borrowing power based on your current income.

We can help you understand how much you can afford to borrow across different lenders. It may not be necessary to give up leisure time for overtime to achieve your home-buying goal.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Thinking of a tree change? You might find more affordable homes

Growing numbers of younger Australians are opting for regional living, and part of the lure of a ‘seachange’ or ‘treechange’ can be the chance to get more bang for your buck.

As property values climb higher, the median home price across our combined capitals has just pushed past the $1 million mark.

That’s seeing a rethink among plenty of Aussies, who are swapping city skylines for regional horizons.

Relocations from capitals to regions are outpacing moves in the opposite direction, according to the latest Regional Movers Index. 

And recent CommBank research shows more than 5.3 million Australians – about 37% of city dwellers – would consider a tree change.

Gen Z (aged 18-29) is leading the trend, with almost half considering a regional move.

The Regional Australia Institute (RAI) found more affordable housing is a key appeal for more than two-in-five would-be tree changers, rising to one-in-two Gen Xers (1965-1980).

But are property prices really more affordable outside the big cities? And what should buyers be aware of when it comes to buying a home among the gum trees?

A $250,000+ price difference

There’s no doubt regional Australia can give home buyers a generous serve of affordability.

As a guide, the median home price across our combined capitals is currently $1,002,520.   

That’s a whopping $258,848 higher than the $743,672 median value across regional markets.  

This price gap doesn’t just mean saving on the cost of a regional home, and property-related expenses like stamp duty.

It can also allow first home buyers with a smaller deposit to bring forward their buying plans, or buy a house rather than an apartment.

In addition, a lower purchase price may mean you need to borrow less, which brings the added plus of lower home loan repayments.

What about property price growth?

Let’s bust a few myths.

Yes, you can get great coffee outside of the cities, and no, regional areas don’t always lag behind state capitals when it comes to property price growth.

The latest house price data from Cotality shows regional home values rose 10.3% over the last year, outpacing the 9.2% gains across state capitals.   

This isn’t a one-off.

Regional home values climbed 57.4% over the past five years, compared to 42.8% across the combined capitals.

This reflects what the Australian Housing and Urban Research Institute says is a knock-on effect of the long-term trend of people migrating out of our cities and into regional areas.

Could a tree change impact home loan eligibility?

If you’re considering pulling stumps from the city, and moving to the regions, it is important to be confident about your job prospects.

The good news is that many regional locations have healthy job markets, though this is always worth checking (not to mention taking into consideration your occupation or qualifications).

However, you may not need to change jobs at all.

An RAI study shows close to half (47%) of city dwellers planning a regional move would stay in their current job on a remote or hybrid basis.

Either way, it’s a good idea to talk to us about your work arrangements. That’s because home loan lenders like to see that you have stable employment when you apply for a home loan.

Other than that, the process of applying for a home loan is much the same regardless of where you plan to buy.

If you’re thinking of farewelling the big smoke in favour of country living, get in touch with us today. We can run through your situation and explain the home loan options that are a good fit for your needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

RBA hikes the cash rate by 25 basis points to 3.85%

Bad news for mortgage holders around the country: the Reserve Bank of Australia (RBA) today raised the cash rate by 25 basis points to 3.85%. Today we’ll look at why it did so, and how this rate hike could impact your monthly mortgage repayments.

Well, those three rate cuts in 2025 were nice while they lasted!

But recent ABS inflation data (3.8% in the year to December 2025) has the RBA concerned enough to start 2026 with a rate rise in an attempt to beat inflation back down to the 2-3% target range.

The RBA’s Monetary Policy Board said in a statement that while inflation had fallen substantially since its peak in 2022, it had picked up again in the second half of 2025.

“While part of the pick-up in inflation is assessed to reflect temporary factors, it is evident that private demand is growing more quickly than expected, capacity pressures are greater than previously assessed and labour market conditions are a little tight,” the Board said of its unanimous decision.

“The Board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target.”

How could this affect your minimum monthly mortgage repayments?

Unless you’re on a fixed-rate mortgage, your bank will likely soon follow the RBA’s lead and increase the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate hike means your monthly repayments could increase by about $77 a month.

That could add about $924 a year to your household budget.

If you have a $750,000 loan, your minimum monthly mortgage repayments will likely increase by about $115 a month – or $1380 per year.

Meanwhile, a $1 million loan could increase by about $154 a month – or $1848 a year.

This all assumes that your lender automatically passes on the full 25 basis point hike to your home loan.

Another thing to keep in mind is that when interest rates came down from the recent cycle peak of 4.35% throughout 2025, many banks around the country kept borrowers on the same monthly repayment amount – meaning they paid more off the principal of their home loan each month rather than the interest.

If this is the case for you, your monthly repayment amount (very likely) won’t increase with this latest rate hike – it’s just that more of your repayment (0.25%) will go towards the interest on your loan, rather than the principal. 

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled and the banks have announced their next moves.

Feeling the strain of your mortgage? Let’s talk

Ok, so the RBA has lifted the cash rate – it can be a tough pill to swallow for families on tight budgets. But there are still some steps you could potentially take to help offset this hike.

If it’s been a while since your last home loan review, now could be a good time to check in. You might be able to improve your situation – and we’re here to help you explore your options.

This could include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is unique, and we’re committed to helping you find a solution that fits your needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.