Calculator

Offset Account Calculator

An offset account is a transaction account linked to your home loan. The balance is 'offset' against your loan, so you only pay interest on the difference. Enter your loan and your expected balance to see the estimated saving.

What the saving depends on

The saving shown assumes the offset balance stays at the amount you enter for the whole loan term, your regular repayments don't change and your rate stays the same. In real life the balance goes up and down, so the actual saving will differ.

Book a complimentary strategy session

Use the offset account calculator

← Back to all calculators

How to use the offset calculator

Enter your loan balance, interest rate and remaining term.
Enter your expected average offset balance and any regular deposits.
Compare interest and loan term with and without the offset.

Things to know

Every dollar in the offset reduces the interest you're charged while the money stays available when you need it. Loans with an offset account sometimes carry a higher rate or an annual package fee, so the account needs enough money sitting in it to cover that cost. Some lenders only offer a partial offset.

Hot Tip: Have your salary paid straight into the offset and put day-to-day spending on a credit card you pay in full each month. Your money then sits against the loan for longer.

Worked example (illustrative)

A $600,000 loan with an average $30,000 in offset means interest is charged on $570,000. The calculator shows the interest and years saved if the balance is maintained.

What this calculator assumes

Your offset balance stays at the level entered.
The account offsets 100% of the balance.
Package fees are not included.

Who gets the most from an offset account

Households that keep a healthy savings buffer or emergency fund.
Self-employed borrowers setting money aside for tax. It can sit in the offset until the bill is due.
People planning to turn their home into a rental later, who want to keep savings separate from the loan. Talk to your accountant about how this works for you.

If you only keep a small balance, an offset account can cost more in package fees than it saves. Run the numbers with your real average balance, not the best month of the year.

Related guides

Frequently asked questions

Is an offset account worth it?

It depends on how much you keep in it. Offset loans can have a higher rate or package fee. If your balance is small, the fee can outweigh the saving. The calculator helps you test this.

What's the difference between offset and redraw?

Offset money sits in a separate account you can use day to day. Redraw lets you take back extra repayments made into the loan. Offset is more flexible and keeps your savings clearly separate. Some lenders charge redraw fees or set minimums.

Do all loans have offset accounts?

No. Many basic variable loans don't have one. Some fixed loans offer only partial offset. We can compare offset options across our lender panel. Offset loans sometimes come with a higher rate or a package fee, so the saving needs to outweigh the extra cost for an offset loan to be worth it.

Got a number? Let's see what it means for you

A calculator can tell you what the maths says. It can't tell you which lenders would accept your application, how they treat your income or whether a different structure would suit you better. Book a complimentary loan strategy session. We're based in Brisbane and help clients right across Australia, and in most cases you won't pay us a broker fee because we're paid by the lender you choose.

Book an appointment

Prefer to talk? Call (07) 3194 0888.