With rates rising, should we use savings to reduce our mortgage?

April 25, 2026 — 5:01am

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Hi Nicole, I heard you on the radio talking about strategies to take charge of your finances – that was a great segment and I wanted to ask a question: With rate rises supposed to be coming, should we use our combined savings to pay off our mortgage? We have about $100,000 owing but only six years to pay it off.

Meanwhile, between us, we have about $100,000 sitting in various savings accounts for different purposes. With rates probably about to rise, shouldn’t we just knock off what we owe. It’s just that I’ve heard it said that’s a bad strategy. Why?

Well, the beautiful thing is that you don’t have to – you just need to restructure your loan so you can use your $100,000 in savings to help you pay off your mortgage early. Let me introduce you – I hope you have already heard of it! – to the humble offset account.

An offset account is like a savings account, similar to the type you no doubt have, with one critical difference: the money you hold in it is offset against your mortgage debt. If you have $100,000 in debt and $10,000 sitting in an offset account, you will only pay interest on $90,000.

So,........

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