Banks charged mortgage holders $55m in extra interest after offset account errors, Asic finds
News Source
β’Tue, 28 Jul 2026 14:01:05 GMT
π° What Happened
Asic has found that banks charged mortgage holders $55 million in extra interest due to faulty offset account errors. In one case, a bank accidentally unlinked a customer's offset account when processing a mortgage change, and the error went undetected until the customer noticed higher repayments.
Asic's review of more than 200,000 home loans from eight banks found lenders were 'not getting the basics right'. The amount of savings in offset accounts has ballooned to nearly $350 billion, and the regulator warned the remediation figure would climb higher as more errors are identified.
π The Backstory
Mortgage offset accounts allow borrowers to reduce interest by linking savings to their home loan. A borrower with a $100,000 loan and $20,000 in an offset account should only pay interest on $80,000. These accounts have become extremely popular in Australia as interest rates have risen.
Asic has been cracking down on banking misconduct since the Hayne Royal Commission into banking culture in 2019. Offset account errors represent a systemic failure, costing consumers millions. The regulator has warned that banks need to improve their systems to prevent such errors.
π― Why It Matters
If you have a mortgage with an offset account, your bank could be overcharging you without you knowing. Check your statements β even small errors can cost hundreds or thousands in extra interest.
Asic has found that banks charged mortgage holders $55 million in extra interest due to faulty offset account errors. In one case, a bank accidentally unlinked a customer's offset account when processing a mortgage change, and the error went undetected until the customer noticed higher repayments.
Asic's review of more than 200,000 home loans from eight banks found lenders were 'not getting the basics right'. The amount of savings in offset accounts has ballooned to nearly $350 billion, and the regulator warned the remediation figure would climb higher as more errors are identified.
Mortgage offset accounts allow borrowers to reduce interest by linking savings to their home loan. A borrower with a $100,000 loan and $20,000 in an offset account should only pay interest on $80,000. These accounts have become extremely popular in Australia as interest rates have risen.
Asic has been cracking down on banking misconduct since the Hayne Royal Commission into banking culture in 2019. Offset account errors represent a systemic failure, costing consumers millions. The regulator has warned that banks need to improve their systems to prevent such errors.
If you have a mortgage with an offset account, your bank could be overcharging you without you knowing. Check your statements β even small errors can cost hundreds or thousands in extra interest.