diff --git a/ArduCopter/mode_poshold.cpp b/ArduCopter/mode_poshold.cpp
index bf514c61cd..c06072c597 100644
--- a/ArduCopter/mode_poshold.cpp
+++ b/ArduCopter/mode_poshold.cpp
@@ -377,7 +377,7 @@ void ModePosHold::run()
         pitch_mode = RPMode::BRAKE_TO_LOITER;
         brake.to_loiter_timer = POSHOLD_BRAKE_TO_LOITER_TIMER;
         // init loiter controller
-        loiter_nav->init_target(inertial_nav.get_position_xy_cm());
+        loiter_nav->init_target(inertial_nav.get_position_xy_cm() - pos_control->get_pos_offset_cm().xy().tofloat());
         // set delay to start of wind compensation estimate updates
         wind_comp_start_timer = POSHOLD_WIND_COMP_START_TIMER;
     }