Some of the nation’s biggest banks have been caught short-changing borrowers with mortgage offset accounts.

A review by the Australian Securities and Investments Commission of 204,000 loans settled between March and August 2025 shows administrative errors resulted in some customers unknowingly paying thousands more in interest and adding years to the life of their loans.

Banks have paid out more than $55 million in compensation for offset account failures.

The ASIC report says 55% of home loan holders have an offset account.

One of the biggest issues is when banks do not properly link a savings account to the home loan.

According to ASIC, many issues also arise when changes are made to the original loan, such as changing from a variable to a fixed rate, refinancing or changing loan products.

It advised home loan holders to:

• Check the bank created the offset account

• It is linked to the correct loan

• Interest calculations accurately reflect the reduced balance of your loan as per how much has been offset