Offset Accounts

What is an offset account?

An offset account is a savings or transaction account linked to your home loan. The balance in the offset account is deducted from your loan balance when calculating interest. For example:

• Mortgage balance: $500,000
• Offset account balance: $50,000
• Interest calculated on: $450,000

This means you pay less interest each month without actually making extra repayments.

Setting up an offset account in Finance Frank

1. Add your savings account as an asset

Go to Wealth > Assets and add a new asset with the category Savings or Cash.

2. Toggle "Offset Account"

When the category is set to Savings or Cash and you have at least one mortgage liability, you'll see an Offset Account toggle appear in the form.

Turn it on and select the mortgage it offsets from the dropdown.

3. See the savings

Once linked, you'll see:

• An OFFSET badge on the asset card, showing which mortgage it's linked to
• On the mortgage card: the offset balance, effective balance (loan minus offset), and monthly interest saved

How interest savings are calculated

Finance Frank calculates your monthly interest saving as:

Monthly saving = offset balance x (interest rate / 12)

For example, with a $50,000 offset and a 6% interest rate:

$50,000 x 0.06 / 12 = $250/month saved

That's $3,000 per year in interest you don't have to pay.

Multiple offset accounts

You can link multiple savings accounts to the same mortgage. Finance Frank will sum all offset balances when calculating the effective balance and interest savings.

Frank AI and offset accounts

Frank is aware of your offset account relationships. You can ask questions like:

• "How much am I saving with my offset account?"
• "What if I put an extra $10,000 into my offset?"
• "Should I pay off my credit card or add to my offset?"