Mortgage holders squeezed by rising costs have been saving money in offset accounts to blunt the impact of higher interest rates as offset balances continue to grow “astronomically” since the pandemic.

Australians aged under 55 have been rapidly eating into their savings as they bear the brunt of the Reserve Bank’s fight against inflation.

The amount of money homeowners have been holding in mortgage offset accounts has jumped since 2019, a significant proportion of those funds coming from customers who have consolidated their savings accounts to offset interest repayments on loans as high as 7 per cent.

National Australia Bank has released figures showing offset balances have grown 55 per cent since the pandemic to $45 billion. Nearly 70 per cent of all new eligible loans are taking up offset accounts – up from 50 per cent just two years ago.

“The rise in offset accounts has been astronomical over the medium term – since the pandemic, they’re up 55 per cent,” said Andy Kerr, homeownership executive at NAB. “Even with the cost-of-living increases and the interest rate rises, we’re still seeing offsets growing year on year.”

Kerr said NAB customers, on median, have deposited about $55,000 into their offset account in the past year, with 40 per cent of those funds from people consolidating savings accounts.

While the take-up of offset accounts has substantially increased since the pandemic, so too has the price of homes, which soared 40 per cent nationally. NAB did not detail the average loan size but said those balances had surged 45 per cent over that period.

At Westpac, offset balances grew from $41 billion in 2019 to $60 billion. At ANZ, they grew from $27 billion to $47 billion over that same period, although it has remained relatively stable over the past year. It is a similar story at CBA, where balances grew from $50 billion to $62 billion in the past five years, although it has declined by $1 billion since December.