Mortgage Offset Calculator
See how your offset account balance reduces interest and shortens your loan.
Loan Details
$
$600,000
%
Offset Account
$
$50,000
$
How much extra you add to your offset each month
Total Interest Saved
$486,478
Time Saved
11 years 3 months
earlier payoff
Total Interest Without Offset
$695,029
Total Interest With Offset
$208,551
Interest Comparison
Without offset$695,029
With offset$208,551
You save: $486,478
Year-by-Year Snapshot
| Year | Balance (No Offset) | Balance (With Offset) | Offset Balance | Interest Saved |
|---|---|---|---|---|
| 1 | $592,632 | $588,877 | $74,000 | $3,755 |
| 2 | $584,809 | $575,588 | $98,000 | $9,222 |
| 3 | $576,504 | $559,998 | $122,000 | $16,506 |
| 5 | $558,326 | $521,344 | $170,000 | $36,983 |
| 10 | $502,114 | $373,386 | $290,000 | $128,729 |
| 15 | $426,293 | $161,037 | $410,000 | $265,257 |
| 20 | $324,022 | $0 | $530,000 | $378,823 |
| 25 | $186,073 | $0 | $650,000 | $456,712 |
| 30 | $0 | $0 | $770,000 | $486,478 |
Assumptions
- •Principal & interest repayments with a fixed interest rate of 6.0% for the entire loan term.
- •The offset account balance grows by a constant $2,000 per month. In practice, offset balances fluctuate with spending and income.
- •Monthly repayment stays constant at $3,597 (based on the no-offset scenario). With offset, more of each repayment goes to principal.
- •This does not account for offset account fees, rate changes, or redraw facility differences.
This is a simplified estimate. Your actual savings will vary based on spending patterns, income timing, and rate changes. Consult your lender or mortgage broker for personalised advice.
How to use this calculator
When to use this
You have or are considering an offset account and want to see how much it saves over the life of your mortgage. This helps you decide whether to keep savings in offset versus other investments.
Steps
- Enter your loan amount, interest rate, and loan term.
- Enter your current offset account balance.
- Enter how much you can add to your offset each month — this is money beyond your regular repayments that sits in the offset account.
- Review the total interest saved and how many years earlier you could pay off your loan.
Tips
- Every dollar in offset saves interest at your mortgage rate — this is a tax-free equivalent return, making it very competitive with other investments.
- A $50k offset at 6% saves $3,000/year in interest — equivalent to a ~$4,300 pre-tax return at the 30% tax bracket.
- Keep emergency funds in your offset — rather than a savings account, your emergency fund works harder by reducing mortgage interest while remaining fully accessible.
- Higher interest rates = more value from offset — in a high-rate environment, offset accounts become even more powerful since every dollar offsets a higher interest charge.