Question: How do banks make money from home loan offset accounts?

(Posted by: van on 2010-03-07 19:04:17)

I'm looking at home loan features, one of which is an offset account. Seeing as in general banks charge home loans at a higher rate than what they pay savings accounts, us borrowers would save interest money by having this account whilst the banks earns less. So why do banks offer this feature or basicall how do they make money from this ? Yes they charge a pretty small fixed monthly fee and a slightly higher rate, but wouldn't say thats significant, maybe they just want to have your savings account with them ?