Offset Account Calculator

Calculate how much interest you can save with an offset account against your home loan.

Data stays on your deviceATO sourced data

Home Loan Balance

Offset Account Balance

Interest Rate (%)

Loan Term (years)

Interest Saved

$224,663.74

Time Saved

5yr 11mo

How your offset saves you money

Your $50,000.00 offset balance reduces the interest charged on your $500,000.00 loan. You only pay interest on $450,000.00 (the difference). This saves you $20.52/day in interest.

Without OffsetWith Offset

Monthly payment$3,160.34$3,160.34

Total interest$637,722.44$413,058.70

Paid off in30 years24yr 1mo

Loan Balance Comparison

Without Offset With Offset

A 100% offset account reduces the loan balance that interest is calculated on. Your money stays accessible — you can withdraw it anytime. The key benefit: you save interest at your home loan rate (currently 6.5%) which is often higher than savings account rates, and the savings are tax-free.

Disclaimer

This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available ATO data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.

Frequently Asked Questions

Is an offset account worth it?

Generally yes, if you can maintain a reasonable balance. Every $10,000 in your offset on a 6.5% loan saves about $650/year in interest — tax-free. Even a modest $20,000 offset balance can save over $80,000 in interest and cut 3+ years off a 30-year mortgage. The key benefit is your money stays accessible.

What is the difference between offset and redraw?

An offset account is a separate transaction account that reduces interest on your loan. A redraw facility lets you withdraw extra repayments you've already made. The key difference: offset money is always yours, while redraw may have restrictions and the lender could theoretically limit access.

What is Offset Account?

A mortgage offset account is a transaction account linked to your home loan. The balance in your offset account is deducted from your loan balance before interest is calculated, effectively reducing the interest you pay.

How this calculator works

The calculator shows the interest savings from having money in your offset account. For example, if your loan is $500,000 and your offset balance is $50,000, you only pay interest on $450,000. Your repayments stay the same, but more goes toward the principal, paying off the loan faster. The comparison chart shows both scenarios — with and without offset — so you can see the cumulative effect. Unlike a savings account, offset savings are tax-free because you're reducing interest charged rather than earning taxable interest.

All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.

Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.

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