All Categories > Frequently asked questions > Types of home loans and features > What is an offset facility and how does it work?

What is an offset facility and how does it work?

An offset facility (offset account or offset sub-account) is similar to a savings account, however it is linked to your home loan and offsets the balance of your home loan. The balance of money in your offset facility is used to reduce the outstanding loan balance from which interest is calculated. Instead of earning interest like a normal savings account, having money in an offset facility means you pay less interest on your home loan, which is calculated daily by the bank and charged to your loan monthly.

Qantas Money Offset and Atlas Home Loans offer the ability to add multiple offset facilities, including on our fixed rate loans.

Why have multiple offset facilities?

Being able to access multiple offset facilities means you can ‘bucket’ your money which some people do in order to manage their cash flow. Different accounts can be used for different purposes - one for bills, one for discretionary spending, one for emergencies, one for holidays, one for home renovations, etc.

Can I withdraw money from an offset facility?

An offset facility has most of the features of a transactional account. You can deposit money into it and withdraw from it any time to pay bills or for day-to-day expenses. You also get full access to your money via online and/or mobile banking, ATMs, EFTPOS, and a debit card.

Is my money protected?

Our Offset Home Loan is funded by Bendigo Bank, who also provide the associated offset account(s). Because Bendigo Bank is an Authorised Deposit-Taking Institution (ADI), your funds in your offset account/s are guaranteed under the Australian Government's Financial Claims Scheme (FCS) for up to $250,000 in the unlikely event that the bank fails.

Our Atlas Home Loan is funded by ColCap, who are a non-bank lender (non-ADI). The funds in the offset sub-account are not in a separate savings account, but a sub-account built into the loan structure. Non-bank lenders are not covered by the FCS. If a non-bank lender closes down, rather than your savings being guaranteed by the FCS, your offset balance reduces your net loan balance which would then be sold to another financial institution for the remaining loan term.

Qantas Money Home Loan offset facilities

We don't build the cost of the offset facilities into our interest rate. Whether you have one offset account or multiple, the cost is covered by the servicing fee of the loan.

With our offset facilities you get full access to your money via online banking (Atlas Home Loan) or mobile app (Offset Home Loan), ATMs, EFTPOS and a debit card.

Adding or removing offset facility

If you decide, after you get your home loan, that you'd like an offset facility, or additional offset facilities, you can add these to your existing home loan. Alternatively, you can remove an offset facility from your existing home loan. There is a fee that will be incurred if you change from a Basic Home Loan to an Offset Home Loan. See a breakdown of the costs associated with offset facilities on our rates and fees page.

To add or remove an offset facility before settlement, please give us a call on 1300 992 700 or email myenquiry@homeloans.money.qantas.com.

To add or remove an offset facility after settlement, please give us a call on 1300 992 700 or email myloan@homeloans.qantasmoney.com for Offset Home Loans funded by Bendigo Bank, or colcap.myloan@homeloans.money.qantas.com for Atlas Home Loans funded by ColCap Financial.

What is the difference between an offset facility and a redraw facility?

Redrawing means accessing extra payments that you’ve made on your home loan. Both a redraw facility and an offset facility allow you to access the money you are using to reduce interest, but they do it in different ways.

When you use a redraw facility, you are redrawing extra payments you’ve made into your home loan account. Non-bank lenders' offset facilities are referred to as sub-accounts - they form part of the loan itself, acting in a similar way as a redraw facility but with transactional capability.

Banks’ offset facilities are referred to as offset accounts. These are separate bank accounts to your loan, so your money sits separately in an account that acts like a traditional transaction account.

With Qantas Money Home Loans, you can ‘redraw’ additional payments you’ve made whenever you want for free, you just need to make sure you have at least one month's minimum repayment left to reduce the risk of overdrawing on the home loan.