Australian mortgage offset account overcharges

The Australian Securities and Investments Commission (ASIC) audited offset‑account practices across eight major banks, reviewing more than 200,000 home loans. It found systemic failures, with many accounts either not linked to the mortgage or not delivering promised interest savings. As a result, thousands of borrowers missed expected interest reductions, and some paid several thousand dollars extra in a single month.

Banks have so far paid out over $55 million in compensation to affected customers. ASIC warned that the true scale of losses could be larger and urged borrowers to verify that their offset accounts are correctly linked. With roughly 55 % of Australian home loans now holding offset accounts worth about $349 billion, the regulator called for stronger controls and greater transparency.

The findings prompted ASIC to highlight the need for improved oversight and for consumers to monitor their accounts to avoid being "doubly hit" by missed savings and higher interest costs.