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The Commonwealth Bank (CBA) has recorded growth in the number of eligible customers with an offset account, along with observing a rise in the balances affiliated with those offset accounts over the last 12 months.
According to CBA, the number of customers with offset accounts rose by just under 10 per cent with total account balances increasing by a similar amount over the 12 months to July 2022.
As reported in The Adviser, this recent growth follows CBA’s research earlier this year when it was revealed that the majority of home owners were actively preparing for the impending rate rises on their mortgage.
The findings were gathered from a House of Brand group survey of 1,072 respondents (419 of whom had a home loan) conducted between 16 and 21 April 2022.
It was found that 92 per cent of Australian home owners had already taken steps to mitigate the impact of rising mortgage rates.
The research also found at the time that 37 per cent of Australians have been putting their money into offset/redraw accounts and a third (33 per cent) have been looking for cheaper providers for utilities and services.
CBA’s executive general manager home buying, Dr Michael Baumann, said that although some of the growth in offset accounts could be “attributed to certain seasonality factors”, it was clear that customers are looking for ways to better manage their finances given the current environment.
Dr Baumann further stated it is “encouraging” to see home owners taking proactive steps to strengthen their financial position with rates still expected to increase further over the next few months.
In conjunction with CBA’s research, a survey commissioned by Money.com.au sought to gain insight from 1,018 mortgagors on how financially prepared Australians were for a new environment of higher interest rates and the rising cost of living.
The survey (conducted by PureProfile in late April 2022), found that 80 per cent of mortgagors have a buffer in their home loans to meet interest rate rises.
Respondents were requested to specify how much money they have in their mortgage offset account, home loan redraw facility or savings account to determine their ability to navigate increasing costs.
Over two-fifths (42 per cent) of respondents said they had more than $20,000 in offset accounts/redraw accounts, while 28 per cent had more than $50,000 and 14 per cent had more than $100,000.