An offset mortgage can reduce the amount of interest you pay on your home loan, by using money in your everyday and savings account to ‘offset’ your home loan interest charges.

Benefits at a glance

  • Money sitting in linked everyday or savings account will reduce the interest you pay on your home loan

  • Flexibility to make extra payments whenever you like

  • You can increase your regular payments without penalty.

How it works

You can link up to eight Kiwibank savings and everyday accounts to your home loan. The balance in these accounts are ‘offset’ against your mortgage.

  • Take the balance of your home loan
  • Subtract the balance of your linked savings and everyday accounts
  • Only pay interest on the difference
  • Each month your statement will show you how much you’ve saved in interest
  • Available to individuals, or couples if they’re married, in a civil union or a de facto relationship.

Linking accounts

You can link any of our savings and everyday accounts (but not Term Deposits, KiwiSaver, Notice Saver, PIE Online Call and PIE Term Deposits). A savings or everyday account can only be linked to one offset mortgage.

You can also get your family involved to save even more. You can use your partner's, parents' and children's Kiwibank savings and everyday accounts to your offset mortgage – up to eight accounts in total.

You use your savings and everyday accounts as usual – interest is calculated daily, so the more you have in your linked accounts day-to-day, the more you’ll save.

Because your linked accounts are offsetting the interest you’re paying on your home loan, you won’t earn any credit interest on them.

How the interest rate and repayments work

An offset mortgage has a variable rate – it can change as the market does. Interest is calculated daily, so the more you have in your linked accounts day-to-day, the more you’ll save.

You have set repayments on set dates and you make them the same way you would on a standard variable loan. Because it’s a variable rate, you can make extra repayments whenever you like without paying a penalty.

You don’t have to put your whole loan in an offset mortgage. You can choose to have part of your home loan on a fixed interest rate and part of it on offset. If you decide you want to fix all of your home loan, we’ll just de-link your accounts from your home loan and they’ll go back to earning credit interest as usual.

Talk to a home loan expert - we're here to help

If you want to chat about your home loan options, get in touch with one of our home loan experts. Our Mobile Mortgage Managers can meet you wherever suits you, or if you’d prefer to come into a branch you can make an appointment with one of our Banking Consultants.