Offset Account Calculator
See how much keeping money in an offset account could save on your home loan — in interest, and in years off the loan.
Interest saved
$109,662
over the life of the loan
Time saved
3 yrs
off the loan term
Paid off in
27 yrs
at $2,998/mo
Assumes a constant offset balance and principal-and-interest repayments held at the no-offset level, a fixed rate, and excludes fees and redraw. Your real saving depends on your offset balance over time and any package fee. Not financial advice.
How an offset works
An offset account is a regular transaction or savings account linked to your home loan. The bank subtracts its balance from your loan balance before calculating interest, so every dollar in the offset is a dollar you’re not paying interest on — while staying fully accessible. Keeping your salary and savings in an offset is one of the simplest ways to cut years off a loan. Want a loan with an offset? Compare them in our home loans comparison, or see if switching could help with the refinance calculator.
Frequently Asked Questions
How does an offset account save you money?
An offset account is a transaction or savings account linked to your home loan. Its balance is 'offset' against your loan balance, so you're only charged interest on the difference. $20,000 in an offset on a $500,000 loan means you pay interest as if you owed $480,000. Because your repayment stays the same, the interest you save goes to principal — so the loan clears sooner and costs less overall.
Is an offset account better than paying down the loan?
They have a similar interest effect, but an offset keeps your money accessible — you can withdraw it any time, unlike extra repayments which may need a redraw. That flexibility is why many borrowers keep their savings and salary in an offset. The trade-off is that offset loans sometimes carry a slightly higher rate or an annual package fee, so weigh the interest saved against any extra cost.
Does the money in my offset earn interest?
Not directly — but it effectively 'earns' your home loan rate by reducing the interest you're charged, and that saving is tax-free (unlike interest from a savings account, which is taxable). For most borrowers, offsetting a home loan rate beats the after-tax return on a savings account.
Is this offset calculator financial advice?
No. It's a general estimate using a simplified model — a constant offset balance, principal-and-interest repayments, a fixed rate, and no fees or redraw. Your real saving depends on your actual offset balance over time, your rate, and any package fee. Confirm details with your lender.
Related guides
Estimates are general in nature and exclude fees, redraw and rate changes. Confirm figures with your lender before making decisions. Not financial advice.