Advanced Finance
Offset Account Savings Calculator
Calculate how much interest and time an offset account saves on your home loan.
How this calculator works
Calculates the loan with and without the offset balance. Interest is charged on (loan balance minus offset balance) each period. The saved interest is the difference between the two scenarios. Also shows how many years earlier you pay off the loan by maintaining the offset.
Average balance maintained in your offset account
Income deposited each month (grows the offset before bills)
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FAQ
Frequently asked questions
How does a mortgage offset account work?
An offset account is a transaction account linked to your home loan. The balance in the offset reduces the loan balance that interest is charged on. If your loan is $500,000 and your offset has $30,000, you only pay interest on $470,000.
Offset account vs extra repayments?
Both save the same amount of interest. The key difference is accessibility — offset funds can be withdrawn anytime, while extra repayments into the loan may need a redraw facility and could be restricted with fixed-rate loans.
Is an offset account worth the higher fee?
Offset accounts typically come with packages costing $300-$400/year. If your offset balance saves more interest than the fee costs, it is worth it. At 6.5%, even a $10,000 balance saves $650/year — well above the fee.
Can I have multiple offset accounts?
Some lenders offer multiple offset sub-accounts linked to one loan. This can help with budgeting (e.g., separate accounts for bills, savings, emergency fund) while all balances offset your loan interest.
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