New stats show big jump in use of offset accounts

article header

Australians are taking increasing advantage of offset accounts when signing up for mortgages, new data has revealed.

The number of mortgages with offset facilities reached 2.1 million at the end of March 2017 – a 9.3 per cent jump on the March 2016 result.

There was also an increase in the share of loans with offset facilities, from 35.0 per cent to 37.0 per cent.


These statistics, which were provided by APRA, the banking regulator, cover authorised deposit-taking institutions (ADIs) with at least $1 billion of mortgages on their books. This captures 98.7 per cent of the mortgages held by ADIs.

March quarter Quarterly change Annual change
Total number of residential term loans to households 5.8 million 0.6% 3.6%
Loans with offset facilities 2.1 million 0.9% 9.3%
Loans with redraw facilities 4.1 million 0.5% 4.5%
Interest-only mortgages 1.7 million -0.4% 2.6%
Reverse mortgages 28,000 0% 0%
Low-documentation loans 116,000 -3.3% -13.4%

Mortgage exposures hit $1.5 trillion

The ADIs had $1.5 trillion in outstanding mortgages at the end of March – up 7.7 per cent on the year before.

That was driven by an 8.8 per cent increase in owner-occupied loans and a 5.8 per cent increase in investment loans.

Interest-only loans climbed 6.9 per cent, while reverse mortgages climbed 2.0 per cent.

March quarter Quarterly change Annual change
Total value of residential term loans to households $1.5 trillion 1.4% 7.7%
Owner-occupied $971.1 billion 1.5% 8.8%
Investment $523.7 billion 1.2% 5.8%
Loans with offset facilities $669.1 billion 1.9% 12.2%
Interest-only mortgages $583.3 billion 1.4% 6.9%
Reverse mortgages $2.8 billion 0.8% 2.0%
Low-documentation loans $22.4 billion -3.1% -13.1%
Other non-standard loans $930 million -2.9% -13.3%

Investors increase their share

There were $89.3 billion worth of new mortgages issued during the first three months of 2017 – up 9.5 per cent on the first three months of 2016.

Investment loans represented 35.0 per cent of that volume, compared to 31.5 per cent the year before. The owner-occupied share was 65.0 per cent, down from 68.5 per cent.

Mortgage brokers increased their share of the mortgage market from 46.5 per cent to 48.4 per cent.

In a sign that lenders have been tightening their lending standards over the past year, there was a 59.4 per cent drop in the value of loans approved outside serviceability.

As a result, the share of loans approved outside serviceability fell from 4.4 per cent to 1.6 per cent.

March quarter Quarterly change Annual change
Total new residential term loans to households approved $89.3 billion -11.7% 9.5%
Owner-occupied $58.0 billion -11.4% 3.9%
Investment $31.2 billion -12.2% 21.7%
Low-documentation loans approved $377 million -8.9% 42.8%
Interest-only loans approved $32.4 billion -14.7% 13.8%
Other non-standard loans approved $142 million 1.4% 21.4%
Third-party originated loans approved $43.2 billion -12.4% 14.0%
Loans approved outside serviceability $1.5 billion -57.8% -59.4%
LVR 60% and under $22.8 billion -9.5% 12.8%
LVR 60-79.9% $46.8 billion -12.1% 8.5%
LVR 80-89.9% $12.7 billion -12.8% 14.5%
LVR 90% and above $6.9 billion -13.7% -2.2%

^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

Compare your product with the big 4 banks, or add more products to compare
As seen on