Offset a Fixed Loan? Regain Control Now (2026)

Picture this: you've locked in a fixed-rate mortgage to shield yourself from fluctuating interest rates, only to realise that your financial strategy could benefit from an offset account. But can you offset a fixed loan? Understanding how fixed loans and offset accounts work together can be the key to maximising your savings and achieving your financial goals.

Understanding Fixed Loans and Offset Accounts

Fixed loans are a popular choice among Australian homeowners looking for stability. By fixing your interest rate, you protect yourself against rate hikes, ensuring that your repayments remain consistent throughout the fixed term. However, this stability often comes at the cost of flexibility.

Offset accounts, on the other hand, are transactional accounts linked to your home loan. The balance in your offset account reduces the amount of interest you pay on your loan. For instance, if you have a $400,000 loan and $50,000 in your offset account, you only pay interest on $350,000. This can significantly reduce the interest over the life of the loan.

Offsetting a Fixed Loan: Rates, Requirements, and Options

Traditionally, offset accounts have been more common with variable loans. However, some lenders do offer fixed loans with offset facilities. The availability and terms of these options can vary significantly, and understanding them is crucial for making informed financial decisions.

In 2026, interest rates for fixed loans typically range from 6.49% to 8.5%, depending on the lender and your specific financial circumstances. Offset accounts for fixed loans may come with additional fees or slightly higher interest rates compared to those without an offset facility.

It's important to note that not all lenders offer offset accounts with fixed loans. At Esteb and Co, we have access to 83+ lenders, giving you a broad range of options to find a solution that best fits your needs.

How to Set Up an Offset Account with a Fixed Loan

Setting up an offset account with a fixed loan involves several steps, and it's essential to approach this process with careful consideration:

1. Review Your Current Loan: Check if your existing fixed loan allows for an offset account. This information can usually be found in your loan documents or by contacting your lender.
2. Consult with a Mortgage Broker: At Esteb and Co, our mortgage brokers can guide you through the process, helping you understand the pros and cons of different lenders and products.
3. Compare Lender Options: Use our panel of 83+ lenders to find those offering offset accounts with fixed loans. Compare interest rates, fees, and terms to determine the best fit for your financial situation.
4. Apply for a Loan with Offset Facility: Once you've chosen a suitable lender, you'll need to apply for a loan. Ensure that the offset facility is included as part of the loan package.
5. Open Your Offset Account: After your loan is approved, set up your offset account with your lender. Transfer funds into this account to start reducing the principal on which interest is calculated.

Tips and Considerations

Here are some expert tips to consider when looking to offset a fixed loan:

• Calculate Potential Savings: Use an offset calculator to estimate how much you could save in interest over the life of your loan with an offset account.
• Consider the Costs: Some lenders charge higher fees for loans with offset facilities, so weigh these against the potential savings.
• Monitor Interest Rates: Keep an eye on general market trends and be prepared to reassess your loan strategy if significant rate changes occur.
• Evaluate Flexibility Needs: If you anticipate needing more flexibility, a variable rate loan might be a better option, despite the appeal of fixed rates.

Frequently Asked Questions

1. Can all fixed loans be offset?
   Not all fixed loans offer offset facilities. It's essential to verify with your lender or consult with a mortgage broker.
2. Is there an additional cost for offset accounts with fixed loans?
   Yes, offset accounts with fixed loans may come with additional fees or slightly higher interest rates.
3. How much can I save with an offset account?
   The savings depend on your offset balance and loan amount. Use an offset calculator to estimate potential savings.
4. Can I switch from a fixed to a variable loan?
   Switching is possible, but it may involve break fees. Consider consulting with a mortgage broker to explore your options.
5. Do all lenders offer offset accounts?
   No, not all lenders provide offset accounts. Working with a mortgage broker like Esteb and Co can help you find lenders that do.

Offsetting a fixed loan can be a strategic move to reduce your mortgage interest, but it's essential to weigh the benefits against the costs and your financial needs. By understanding your options and seeking professional advice, you can make informed decisions that align with your financial goals.