An offset account is a savings or transaction account linked to your home loan. The balance in your offset account reduces the amount of interest you pay on your mortgage. Financio lets you link these accounts to see the relationship and track your effective loan balance.
How Offset Accounts Work
With an offset account:
- Your savings balance offsets your loan balance for interest calculations
- You only pay interest on the difference (loan minus offset)
- Your money remains accessible while reducing interest
Example: If you have a $500,000 home loan and $50,000 in your offset account, you only pay interest on $450,000.
Setting Up an Offset Link
To link a bank account as an offset to a home loan:
Step 1: Add Both Accounts
First, make sure you have both accounts in Financio:
- Your home loan as a Loan account
- Your offset account as a Bank Account
Step 2: Link the Offset
- Go to Tracking → Accounts and open your offset account (the bank account).
- Click Manage Account.
- Find the Offset Account For (Optional) dropdown.
- Select your home loan from the list.
- Click Save Changes.
- Open the Tracking tab, tap Accounts, then tap your offset account.
- Tap the gear icon in the top right.
- Tap the Offset Account For (Optional) menu.
- Choose your home loan.
- Tap Save.
Link Direction
The link is created from the bank account, not the loan. Edit your savings/offset account and select which loan it offsets. The Offset Account For field only appears once you have a home loan in Financio, so add the loan first.
Viewing Your Offset Summary
Once linked, when you open your offset account you'll see an Offsetting Loan section showing:
| Field | Description |
|---|---|
| Offset Balance | Your savings in the offset account |
| Loan Balance | The total amount owing on your home loan |
| Effective Balance | Loan balance minus offset balance |
The effective balance is what you're actually paying interest on. If your offset balance exceeds the loan, it shows as $0 rather than a negative figure.
Navigating to the Loan
Click View Loan in the offset summary to jump directly to your home loan details.
Tap the Offsetting Loan card to jump to your home loan.
Viewing Offsets from the Loan
Open a home loan and you'll see an Offset Accounts section listing every account linked to it. On the web, each row shows the Offset Account, its Balance, the Effective Loan Balance, and a View Account button. On iPhone, the card header shows the Effective balance for the loan, and each row shows the account and its balance. Tap a row to open that account.
Multiple Offset Accounts
Some mortgages allow multiple offset accounts against a single loan. In Financio:
- Each bank account can only be linked to one loan
- Multiple bank accounts can be linked to the same loan
- On the offset account, Effective Balance subtracts only that account's balance. On the loan itself, the effective balance takes all linked offset accounts into account.
Changing or Removing the Link
To change which loan an offset account is linked to:
- Go to Tracking → Accounts and open your offset account.
- Click Manage Account.
- Change the Offset Account For (Optional) selection, or choose None to remove the link.
- Click Save Changes.
- Open the Tracking tab, tap Accounts, then tap your offset account.
- Tap the gear icon in the top right.
- Change the Offset Account For (Optional) selection, or choose None to remove the link.
- Tap Save.
Net Worth Considerations
Both your offset account and home loan should be included in your net worth:
- The offset account adds to your assets (positive)
- The home loan adds to your liabilities (negative)
Together, they reflect your true financial position. The offset relationship is informational; it helps you see the effective loan balance but doesn't change how net worth is calculated.
Common Questions
Can I link a term deposit as an offset?
In Financio, only Bank Accounts can be linked as offset accounts. If your actual term deposit offsets your mortgage, track it as a Bank Account in Financio to enable the linking feature.
Does this affect my actual mortgage interest?
No. Financio is for tracking only. The offset link in Financio helps you visualise the relationship between your accounts. Your actual interest reduction is handled by your bank based on your real account balances.