Australia’s financial watchdog raises concerns that some major banks failed to properly link mortgage offset accounts, leading to borrowers paying more interest than intended. Reports say tens of thousands of homeowners are affected, with borrowers in aggregate estimated to have paid about $55 million in additional interest due to offset functionality not working as expected. The issue involves mortgage offset accounts where deposited funds should reduce the interest charged on the home loan, but failures in linking or applying the offset benefit result in overcharges. The regulator has placed banks on notice over the conduct and the resulting extra interest payments for customers who use offset accounts, according to coverage shared across outlets. The reporting frames the problem as an administrative or system error rather than deliberate customer misconduct, and it highlights the financial impact on households who may not have been aware that their offsets were not being applied correctly. Banks have been warned by the regulator and are expected to address customer impacts and compliance concerns linked to the offset-account errors and overcharging.