Use our mortgage offset calculator to see how much interest you could save, and how quickly you could pay off your loan, with an offset account.
Benefits of an Offset Account
An offset account can be a powerful tool for those seeking a mortgage.
Use the mortgage offset calculator to:
- See how much sooner you can pay off your loan if you have an offset account.
- Work out how much interest you can save from just having extra cash sitting in a mortgage offset account.
If you want to reduce the interest on your mortgage, get in touch.
How to use it: click Launch Calculator below, enter your details to see your estimate, then change the figures to compare different scenarios.
Home Loan Offset Calculator
This tool allows you to see the impact having different balances in your offset account will have on your remaining loan term
How a Mortgage Offset Account Works
An offset account is a transaction account linked to your home loan. Each day, the lender subtracts your offset balance from your loan balance before it calculates interest. Moneysmart’s guide to offset accounts gives a simple example: with a $750,000 loan and $50,000 in offset, you are only charged interest on $700,000.
Your repayments usually stay the same. However, because the lender charges less interest, more of each repayment goes to principal, so you pay off the loan sooner. Meanwhile, the money stays available for bills, emergencies or your next purchase.
A Worked Example Using the Mortgage Offset Calculator
For illustration only, take a $500,000 loan over 30 years at a hypothetical rate of 6.5% a year, with monthly repayments of about $3,160. This rate was chosen for round numbers and is not a current rate.
- With $30,000 in offset, you’d be charged interest on $470,000, which is roughly $1,950 less interest in the first year.
- If that $30,000 stayed in offset for the whole loan and repayments didn’t change, the loan could finish about four years sooner, saving roughly $150,000 in interest.
These figures are rounded and assume the rate and balance never change. In practice, your offset balance will move up and down, so enter your own figures in the mortgage offset calculator above.
Offset, Redraw or Extra Repayments?
Offset and extra repayments save interest in a similar way. The difference is access: offset money sits in its own account, whereas extra repayments usually go into redraw, which some lenders limit or charge for. Our offset vs redraw guide compares the two in detail, and the extra mortgage repayments calculator shows what paying more each month could do.
Things to Check Before Choosing an Offset
- Loan type: offset accounts are generally available with variable-rate loans. Some fixed loans offer a partial offset or none at all.
- Cost: some lenders charge for an offset through a higher rate, a package fee or both, so compare the cost with the interest you expect to save.
- Full or partial offset: check whether the whole balance offsets the loan, and whether you can have more than one offset account.
- Investment property: keeping savings in offset instead of paying down an investment loan can matter for tax, so speak to your accountant.
If your current loan has no offset, or the fees outweigh the savings, it may be worth reviewing it. After several rate rises in 2026, our refinancing page explains how we compare options for you.
Offset Account FAQs
Usually not. Your scheduled repayment normally stays the same, but more of it goes to principal, so the loan finishes sooner.
Yes. It works like an everyday account, so you can have your pay deposited and use a card to pay bills. Any withdrawal simply reduces the interest saving.
Some lenders offer a partial or limited offset on fixed loans, but many don’t. A split loan, part fixed and part variable with an offset, is one option to discuss.
It gives an estimate based on the figures you enter and assumes they stay the same. Real results depend on your balance, rate changes and fees.
The information on this page is general in nature and does not take into account your objectives, financial situation or needs. Lending criteria, fees and charges apply. Consider whether it is appropriate for you and speak to us for advice specific to your situation. Speak to your accountant or tax adviser about tax.
Need Some Help?
Not sure where to start? That’s exactly what we’re here for. Drop us a message and we will get back to you within one business day with clear, honest advice tailored to your situation.