Mortgages
Mortgage Offset Calculator
Estimate the interest and loan term you save by keeping surplus savings sitting in a 100% offset account linked to your Australian home loan balance.
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Your results
Effective (interest-bearing) balance$550,000.00
Interest without offset (first period)$3,000.00
Interest with offset (first period)$2,750.00
Estimated interest saved$330,090.00
Estimated time saved7 yr 8 mo
Projected offset balance at payoff$184,000.00
Calculation breakdown
- Effective balance
- $600,000.00 loan − $50,000.00 offset = $550,000.00
- First-period interest with offset
- $550,000.00 × (6% ÷ 12) = $2,750.00
Assumptions
- The offset account balance is not a loan repayment — it stays fully accessible to you at any time.
- Interest is calculated daily on the loan balance less the offset balance in practice; here it is modelled per repayment period.
- Interest rate and repayment amount are assumed constant over time.
- Optional monthly additions to the offset are assumed to occur every repayment period.
How this calculator works
Money in an offset account reduces the balance your interest is charged on without being a repayment. This calculator simulates the loan period by period so you can see the first-period interest saving and the shortened loan term.
Frequently asked questions
Is offset better than a savings account?
Usually, because the benefit is effectively tax-free — you avoid interest rather than earning taxable interest.
Does the offset balance pay down my loan?
No. It only reduces the interest-bearing balance. Your money stays yours and stays accessible.
Do offset accounts cost anything?
Many loans with an offset facility charge a higher rate or an annual package fee.
Results are estimates only and are not financial, tax, legal or credit advice.
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