Home Loan Offset Calculator
How much could an offset account save you?
Keeping your savings in an offset account instead of a regular savings account can save you a significant amount of interest on your home loan. Use this calculator to see how much.
How does it work?
An offset account is a savings or transaction account linked to your home loan. The balance in the offset account is subtracted from your loan balance before interest is calculated. So if your loan balance is $500,000 and you have $30,000 in your offset account, you only pay interest on $470,000. The more money you keep in the offset account, the less interest you pay, and the faster you pay off your loan.
The calculator has been provided in good faith as a guidance tool only. Results are not financial advice, are a guide only, and are not a guaranteed outcome or quote. Borrowers should always discuss their individual situation with an Australian Credit Licensee or authorised Credit Representative.
What affects how much your offset account saves you?
The average balance in your offset account
The more you keep in your offset account on average, the greater the interest saving. If your balance fluctuates because you draw on it regularly, the saving is calculated on the average balance, not the peak.
Your interest rate
Because an offset effectively saves interest at your home loan rate, its tax-free benefit becomes more valuable as your interest rate rises.
How long until your loan is paid off
The earlier in your loan term you start using an offset account, the more powerful the effect, because you are reducing a larger outstanding balance.
Getting the most out of your offset account
• Have your salary paid directly into your offset account to maximise the average balance.
• Use your offset account as your everyday account. The more money that sits in it before you spend it, the more interest you save.
• Keep emergency funds in your offset account rather than a separate savings account. You earn no interest on savings accounts but you save your home loan rate in your offset.
• Not all offset accounts are the same. Some are 100% offset (every dollar reduces interest) and some are partial. Make sure your loan includes a 100% offset account.
• Some lenders charge fees for offset accounts. Factor this into the comparison when choosing a loan.
Offset account questions we get asked a lot:
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An offset account is a separate account linked to your loan. Money in it reduces the interest charged but stays accessible like any normal account. A redraw facility lets you access extra repayments you have made directly on the loan. Both reduce your interest, but an offset account is generally more flexible because the funds are more accessible.
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Some lenders allow multiple offset accounts linked to the same loan. This can be useful for separating savings for different goals while all of them still offset your mortgage interest.
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It depends on how much you typically keep in savings. If you have a substantial savings balance that you can keep in the offset account, the interest saving usually far outweighs a small monthly fee. This calculator will help you work out the numbers for your situation.
Want a loan with a genuinely useful offset account?
Not all offset accounts are equal. We will help you find a lender whose offset account actually works the way you need it to.