Loan structure
Offset account calculator
Estimate how much interest you may save if savings are held in an offset account linked to your home loan.
Offset estimate
See what an offset balance may save.
Enter your loan details and a savings balance to estimate interest saved if that balance sits in offset.
Short explanation
Understanding offset accounts
An offset account can be useful when you want savings to reduce loan interest while keeping access to cash, but the right structure depends on product cost, discipline, and lender rules.
How offset accounts work
An offset account is a transaction or savings account linked to a home loan. The balance can reduce the loan amount used to calculate interest, while the loan balance itself remains separate.
If your loan is $650,000 and you keep $50,000 in offset, interest may be calculated on $600,000 instead of the full balance, depending on the product rules.
Offset vs extra repayments
Offset accounts can keep cash accessible. Extra repayments may reduce the loan balance directly but access can depend on redraw rules, processing times, and lender discretion.
The better option depends on whether you value flexibility, whether you trust yourself not to spend the savings, and whether the offset product has a competitive rate and fee structure.
How this calculator estimates savings
The calculator compares a standard principal and interest repayment path with a second path where the offset balance reduces the interest-bearing balance each month.
It assumes the offset balance is constant. It does not model changing savings, package fees, tax issues, redraw, partial offsets, split loans, or rate changes.
Want the full explanation? Read: Why an annual home loan review can be worth booking
Estimate basisHow this offset estimate works
This calculator turns the offset concept into a planning estimate, then keeps the product decision separate for broker review.
- The calculator compares a standard repayment path with a path where the entered offset balance reduces the interest-bearing balance.
- It assumes the offset balance stays constant, the rate does not change, and the offset is fully linked to the loan.
- It does not model package fees, partial offsets, split loans, tax issues, redraw behaviour, or future rate changes.
- A broker should check whether the offset product cost and rules are worth it for the borrower's actual savings pattern.
Frequently asked questions
Offset account calculator FAQ
Is an offset account worth it?
It can be worth it when the interest saving is larger than any added fees or rate difference and you value access to savings. The right answer depends on balance, behaviour, rate, and product rules.
Does offset reduce my repayment?
Usually it reduces interest charged rather than automatically reducing the required repayment. Keeping repayments the same can help the loan balance fall faster.
Is offset better than redraw?
Offset can provide simpler access to funds, while redraw depends on lender rules. Some borrowers prefer offset for flexibility, but the product cost still needs to stack up.
Can I have offset on a fixed-rate loan?
Some fixed loans offer partial or limited offset, but many do not. Check the exact lender and product rules before relying on an offset strategy.
Should I refinance to get offset?
Only if the total position makes sense after rate, fees, features, switching costs, and how much cash you will keep in offset are compared.
When you're ready to review your structure
A calculator gives you a starting number.
Turn the offset estimate into a practical product check.
Treat the offset saving as a scenario. A broker still needs to compare the expected offset balance against any higher rate, package fee, redraw needs and loan-feature limits.
- Compare package costOffset accounts can come with package fees or higher rates, so the saving needs to beat the cost.
- Check access rulesConfirm whether funds stay accessible, whether multiple offsets are allowed, and how interest is calculated.
- Speak with a brokerA broker can compare offset, redraw, split-loan, and refinance options against your goals.
This calculator provides a general estimate only. It is not approval, credit advice, tax advice, or a loan recommendation. Actual outcomes depend on lender policy, product rules, fees, offset eligibility, repayment settings, rate changes, borrower circumstances, and verification.