The Australian Securities & Investments Commission has published a review finding weaknesses in how eight banks, representing more than 70% of the Australian home loan market, set up, monitor and manage mortgage offset accounts. Failures to link accounts correctly resulted in some customers paying more interest than required, sometimes until they complained or ASIC intervened. All eight banks had weaknesses, including difficulty identifying customer requests, inconsistent failure detection, delayed remediation and compensation, and limited customer visibility of offset benefits. Refinancing or switching loan products could also disconnect an account. Reports to ASIC show banks paid more than AUD 55 million in compensation for offset account failures between Sept. 1, 2023, and Aug. 31, 2025. ASIC is encouraging borrowers to verify that their offset account is linked to the correct loan, provides the expected interest savings and remains connected after mortgage changes. Australian borrowers held about AUD 349.1 billion in mortgage offset accounts as of March 2026.
Australian Securities & Investments Commission2026-07-29
Australian Securities & Investments Commission finds mortgage offset account failures across eight major banks
The Australian Securities & Investments Commission found weaknesses in mortgage offset account management at eight banks covering more than 70% of the home loan market, with some customers paying excess interest because accounts were not properly linked. Banks reported paying more than AUD 55 million in compensation for offset failures over the two years to Aug. 31, 2025. ASIC is urging borrowers to check their account links, particularly after refinancing or switching loan products.