Offset mortgages in NZ: how offset home loans work and which banks offer them

What is an offset mortgage?

An offset mortgage is a home loan linked to your everyday and savings accounts. Before the bank works out your interest, it takes the money in those accounts off your loan balance, so you only pay interest on what's left. Your money stays in your accounts, and you can use it whenever you like.

How an offset home loan works

Kiwibank's own example is an offset loan of $50,000 with $20,000 in the linked accounts. You'd pay interest on $30,000. Interest is worked out daily, so the more you keep in your accounts each day, the more you save.

Your repayments stay the same, so the interest you save goes towards paying off the loan faster. Westpac's example is a $750,000 loan over 30 years at 6.39%, split into $730,000 fixed and $20,000 floating with offset. If you always keep $20,000 in savings, Westpac says you'd save over $97,000 in interest and pay off the loan two years earlier.

Money in your linked accounts doesn't earn interest. That's usually a good trade, because your loan rate is higher than what a savings account pays, and the interest you save isn't taxed.

Which banks offer offset mortgages in NZ?

Three of the main banks have an offset home loan. These details come from each bank's website, checked on 11 November 2026.

• Kiwibank

  Loan

  Offset home loan

  Linked accounts

  Up to 8 Kiwibank everyday accounts

  Family accounts

  Spouse, partner, child or parent

  Floating rate

  6.25%

• Westpac

  Loan

  Choices Floating with Offset

  Linked accounts

  Up to 10 eligible accounts

  Family accounts

  Partner, parents and children

  Floating rate

  6.39%

• BNZ

  Loan

  TotalMoney

  Linked accounts

  Up to 50 TotalMoney accounts

  Family accounts

  A couple and their children

  Floating rate

  6.44%

ASB and ANZ don't offer offset loans. ASB's Orbit and the ANZ Flexible Home Loan are both revolving credit loans, which work differently.

Can family members offset your mortgage?

Yes. At all three banks, family members can link their own accounts to your offset loan. The money stays in their name, and they can use it or unlink it whenever they want. While it's linked, it doesn't earn them interest, and it saves you interest instead.

Who counts as family depends on the bank:

• Kiwibank lets you link the everyday accounts of your spouse or partner, your children and your parents.
• Westpac lets your partner, parents and children link their eligible accounts.
• BNZ's TotalMoney groups can include a couple and their children. That means parents' accounts can offset a loan one of their children has in the same group.

Here's what it could be worth. Say your parents have $80,000 in savings, about 10% of the national median house price. Without the offset, you'd probably fix that part of your loan at around 4.99%, the lowest 1-year rate at the main banks on 11 November 2026. With the offset, you'd save about $3,990 a year in interest, and every $10,000 offset saves about $500. Your parents would give up the interest they could have earned. At the Reserve Bank's average six-month term deposit rate of 3.58% in October 2026, that's about $2,860 a year before tax.

There are a few catches. If your parents need their money back and the balance falls, you'll pay the floating rate on the part that's no longer offset. At BNZ, everyone in a TotalMoney group can see the balances, account numbers and offset settings of all the accounts in the group, but only the owner can see and use their own transactions. And at Kiwibank, you can't have an offset loan if you also have a guarantor, and it may not be available if you're buying with friends or family.

The guide to how family can help you buy a house covers the other options, like gifts, loans and guarantees.

Offset or revolving credit?

A revolving credit loan, like ASB Orbit or the ANZ Flexible Home Loan, works a lot like a big overdraft. You put your income and savings straight into the loan account to lower the balance, then spend from it. With an offset loan, your money stays in separate accounts, which some people find easier to manage. Only an offset loan lets family money reduce your interest.

Is an offset mortgage worth it?

An offset mortgage is worth it if you or your family keep a good amount in the linked accounts. Offset loans have floating rates. On 11 November 2026 the offset rates were 6.25% to 6.44%, while the lowest 1-year fixed rate was 4.99%. Any part of the offset loan that savings don't cover is charged the floating rate.

So the usual way to use one is to split your loan, as in Westpac's example. Put the amount you can cover with savings on the offset loan and fix the rest. The mortgage rates comparison has each bank's fixed rates, and the mortgage calculator shows how a different rate changes your repayments.

Common questions