Offset home loan

An offset home loan (also known as an offset mortgage) is linked to selected Kiwibank everyday or savings accounts. The balance in these accounts is used to offset the amount of interest you pay on your offset loan.

For example, if you have a home loan of $200,000 and have $10,000 in your linked accounts, you’ll only pay interest on $190,000. The smaller the difference between your offset loan and account balance(s), the less interest you'll be charged.

This is available to individuals or couples if they’re married, in a civil union or a de facto relationship.

An offset loan has an offset variable interest rate, so the interest rate you pay can change at anytime.

You can link up to eight Kiwibank everyday or savings accounts*. These accounts can be your personal, joint borrower's, parents’ or children’s accounts. Each account can only be linked to one offset loan.

Interest is calculated daily, so the more you have in your linked accounts day-to-day, the more you'll save.

Let us know which accounts you’d like linked, as it’s not done automatically.

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

If you no longer want an offset home loan, we can just de-link your accounts and if eligible they'll go back to earning credit interest.

You'll still have a minimum repayment amount which you'll pay on your set repayment date. But as a result of the offsetting, a higher portion of your repayments will go towards your principal so you’ll pay off your home loan faster.

You can also make extra repayments whenever you like without paying a penalty.

You don’t have to put your entire home loan on an offset.

You could also put parts of your home loan on a fixed rate home loan, variable rate home loan or revolving home loan.

Our offset ratio is 1. This means that for every $1 held in an offset account, $1 of lending is offset.