Have you ever heard of the three Cs of growing your mortgage offset account?

1. Crediting your salary
2. Consolidating your savings
3. Cutting back if you can, by making more thoughtful spending decisions

NAB Executive for Home Ownership Andy Kerr explains the easiest way to grow your mortgage offset account is using three Cs, so you can turn it into your savings secret weapon.

“Offsets have been the secret weapon through a higher cost of living and interest rate rises and they’ve helped mortgage holders get ahead and stay ahead,” Mr Kerr said.

“Three simple ways you can think about maximising your offset account is through the ‘three Cs’: crediting, consolidating and cutting back, where you can.

“Asking your employer to credit your salary directly into your offset account means that every single day your pay is in there, even while you’re spending, it’s offsetting the interest on your mortgage.

“Interest is calculated daily so having your salary drop into your offset account, where you have ready access to that cash if you need it, can help blunt some of your interest payment.

“If you have money sitting in other places, consider consolidating it into your offset account.

“Some people have money sitting in different savings accounts paying up to 5% interest but if your mortgage rate begins with a 6%, you should be thinking about using that money to offset your mortgage instead.

“Cutting back if you can, by making more thoughtful spending decisions, is also helping Australian mortgage holders to boost their financial buffer.

“We’ve seen more than half of Australians cut back on things like coffees and lunches out, entertainment and car trips and they’re saving around $320 each month or $3,840 a year.

“4 in 10 Australians say they’re using that money to top up their savings or offsets, which means they’re helping shave interest and time off their mortgage,” Mr Kerr said.

The total amount of money NAB customers have in their offsets has grown 55% since the pandemic, from $29 billion in 2020 to more than $45 billion this year.

Nearly 70% of all new eligible customers are taking up an offset account with their home loan, up from 50% just two years ago.

In the last 12 months, the median amount NAB customers have deposited into their offset account is around $4,500 each month.

“Australians have been steadily adding to their offset accounts, which has helped them blunt the impact of interest rate rises and a higher cost of living while, at the same time, helping them pay off their mortgage sooner and giving them ready access to cash if and when they need it,” Mr Kerr said.

“We’re seeing Australians more deeply engaged in their financial situation than they have been in a long time and offset accounts have played a key part in that.”