Mortgage · Calculator
Mortgage Offset Account Calculator
Compare with-offset vs without-offset scenarios on an Australian mortgage. See exact dollars of interest saved and how many years you can cut off your loan term.
Interest & years savedNo taxable income earned
01 —INPUTS
Average balance held in the linked offset account; reduces the principal that accrues interest.
02 —RESULTS
Without offsetWith offset
Total interest$602,444$506,367
Payoff time30.0 yrs27.4 yrs
Total paid$1,102,444$1,006,367
With $20,000 sitting in the offset, you save $96,077 in interest and 2.6 years of repayments.
03 —BREAKDOWN
Amortisation with offset applied
| Period | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $3,062.34 | $582.34 | $2,480.00 | $499,417.66 |
| 2 | $3,062.34 | $585.35 | $2,476.99 | $498,832.30 |
| 3 | $3,062.34 | $588.38 | $2,473.97 | $498,243.92 |
| 4 | $3,062.34 | $591.42 | $2,470.93 | $497,652.51 |
| 5 | $3,062.34 | $594.47 | $2,467.87 | $497,058.03 |
| 6 | $3,062.34 | $597.55 | $2,464.80 | $496,460.49 |
| 7 | $3,062.34 | $600.63 | $2,461.71 | $495,859.85 |
| 8 | $3,062.34 | $603.74 | $2,458.61 | $495,256.12 |
| 9 | $3,062.34 | $606.85 | $2,455.49 | $494,649.26 |
| 10 | $3,062.34 | $609.99 | $2,452.35 | $494,039.27 |
| 11 | $3,062.34 | $613.14 | $2,449.20 | $493,426.13 |
| 12 | $3,062.34 | $616.31 | $2,446.04 | $492,809.82 |
| 324 | $3,062.34 | $3,062.34 | $0.00 | $14,167.01 |
| 325 | $3,062.34 | $3,062.34 | $0.00 | $11,104.67 |
| 326 | $3,062.34 | $3,062.34 | $0.00 | $8,042.32 |
| 327 | $3,062.34 | $3,062.34 | $0.00 | $4,979.98 |
| 328 | $3,062.34 | $3,062.34 | $0.00 | $1,917.63 |
| 329 | $1,917.63 | $1,917.63 | $0.00 | $0.00 |
FAQ
How does an offset account save interest?
Each repayment period, interest is charged on the loan balance minus the offset balance. Holding savings in offset reduces the principal that accrues interest, so more of each repayment goes to principal.
Is offset interest tax-free?
Offset balances do not earn taxable interest because they reduce the loan's interest cost rather than paying you interest. This is one reason offset is often preferred over a high-interest savings account for owner-occupied loans.
Does offset always beat extra repayments?
Not always. Offset preserves liquidity (you can withdraw at any time), while extra repayments reduce flexibility unless your loan has a redraw facility. For pure interest savings, both have the same dollar effect at equal balances.