These home loans offer low costs, coupled with a host of features, giving the best overall value.
7+
Great
These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.
5+
Standard
Usually the home loans would offer above average rates. They may still include some competitive features.
0+
Basic
Higher costs and/or fewer features.
Home loan offset calculator
*Please note that the calculator provides an estimate of your potential offset savings only. The calculator does not take into account various details such as loan fees or changes to your interest rate.
Using the offset calculator
Finder's home loan offset calculator is simple to use. If you already have a home loan then input your interest rate and loan amount.
If you don't have a home loan yet, use your best estimate (and compare home loans to find a reasonable interest rate to use as an example).
Loan term and loan amount. Enter the total amount you've borrowed and the length of the home loan. If you don't have a loan yet, put in 30 years and an estimated amount.
Interest rate. Put in your current interest rate or an estimate if you're not sure.
Repayment frequency. Your repayment frequency is either weekly, monthly or fortnightly. This part of the calculator refers to your regular repayments and not any offset payment.
Offset amount. Enter the amount of money you're planning to save in the offset account as a single sum.
Offset starts at year. If you currently have a home loan, how long have you had it for? If you're 4 years into your home loan, put 4 years. If you don't have a home loan yet and are planning to save money in the offset account from day one, put 0 years.
Here's a helpful example to show you how it works.
Offset savings example calculation
Let's say you are 3 years into a 30-year, $500,000 home loan with a 100% offset account, which you haven't yet added any savings to. You have built up some money in a seperate savings account, earning around 4% interest, and you want to see if an offset account will help you.
You enter your loan details into the offset calculator:
Loan amount: $500,000
Loan term: 30 years
Interest rate: 5.80%
Offset (savings) amount: $25,000
Start offset at year: 3
Results: You will repay your home loan 2 years and 5 months early and save $84,124.59 in interest
The $25,000 savings results in you paying $84,124.59 less in interest. Instead of paying this in interest, this money will go towards your loan principal. If you add more money to the offset account over time, this saving will increase.
How much Aussies have in offset accounts
The latest APRA figures show that Australians have $307.6billion in their offset accounts. This is a 13% increase year-on-year.
A home loan offset account acts like a normal bank account but it's attached to your home loan. And instead of earning you interest, the money in the offset account saves you in interest charges.
It works by offsetting the loan principal (the money you are repaying). For example, if you have $400,000 on your home loan and $20,000 in an offset account, then your lender sees this as a $380,000 loan principal. Thus, you are charged less in interest.
Your repayments won't change month to month with that $20,000 saved in offset. Instead, you will pay less in interest and pay more off the loan principal, meaning you repay the loan faster.
You can withdraw and spend the money in your offset account if you need to. This will reduce the amount of interest you avoid paying, but it gives you more control over your money to spend in emergencies.
Our expert says: Top up your savings
"While the offset account calculator can provide a quick estimation of how much you might be able to save, there are other factors to consider.
For instance, your savings will fluctuate depending on the interest rate you have at the time. It also doesn't take into account whether you withdraw from the account or add money in. Use the calculator as a starting point, but you should always make sure you're adding into the account as much as possible to increase those savings as much as possible."
Not every home loan has an offset account. It's a premium loan feature and many basic variable loans and fixed rate loans don't come with offsets.
If your loan doesn't have an offset account but you think you could save interest with an offset, consider refinancing your loan. This is the process of switching from one loan and lender to another.
Compare your options and find a suitable loan (ideally with a lower interest rate) and a 100% offset account. Once the loan is approved, you can transfer funds from your savings to the new offset account.
While similar, a redraw facility is different to an offset account. When you save money in an offset account it is your money in your account. You can withdraw and spend it as needed.
With a redraw facility, you make extra repayments onto your home loan and redraw (in other words, withdraw) from the loan itself. This money is your lender's money and they are allowing you to access some of it, but that is at their discretion.
While extra repayments also shrink your interest costs as offset savings do, a redraw facility is less flexible. Some lenders restrict how much of your extra repayments you can access, or charge a fee for doing so.
Most offset accounts will offset your loan principal 100%, so every dollar you save in the account offsets your principal by the same amount, dollar for dollar. Partial offsets only offset your loan principal to a specified percentage. For example, a partial offset may offset your principal by 60%, meaning $1 offsets your principal by 60 cents.
Partial offsets are significantly less beneficial and our calculator does not offer a partial offset calculation. It's not worth settling for a partial offset account when there are so many fully-featured 100% offset account options available.
We currently don't have that product, but here are others to consider:
How we picked these
What is Finder Score?
The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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If you want to offset your loan, how can you work out the amount you will pay..?
Finder
JohnMarch 27, 2019Finder
Hi Kere,
Thank you for reaching out to Finder.
If you’re considering an offset mortgage, use an offset mortgage calculator to see if you this might be a viable option for you once you have all the variables in hand. You would need the following information to estimate this:
Loan amount. The loan amount refers to the amount of money you have borrowed or plan to borrow.
Loan term. The loan term is the amount of time you have to repay the loan.
Interest rate. The interest rate is the annual percent at which you repay the loan, which can be fixed or variable.
Repayment frequency. The repayment frequency is the interval in which you make your repayments and is generally monthly, fortnightly or weekly.
Offset account information. The offset account balance is the amount you have in your offset account while the ‘start after’ date is the time that has elapsed on the loan before the offset account is used.
If you’d like more professional advice regarding this matter you can compare mortgage brokers in your area and get in touch with one for help today. Hope this helps!
Home equity can help you access extra financing from lenders to spend on things like home renovations or investment properties. Find out how you can calculate the equity in your home.
Our extra loan repayment calculator helps you see how you could save big on interest. Free, fast and easy to use - calculate in 1 minute!
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If you want to offset your loan, how can you work out the amount you will pay..?
Hi Kere,
Thank you for reaching out to Finder.
If you’re considering an offset mortgage, use an offset mortgage calculator to see if you this might be a viable option for you once you have all the variables in hand. You would need the following information to estimate this:
Loan amount. The loan amount refers to the amount of money you have borrowed or plan to borrow.
Loan term. The loan term is the amount of time you have to repay the loan.
Interest rate. The interest rate is the annual percent at which you repay the loan, which can be fixed or variable.
Repayment frequency. The repayment frequency is the interval in which you make your repayments and is generally monthly, fortnightly or weekly.
Offset account information. The offset account balance is the amount you have in your offset account while the ‘start after’ date is the time that has elapsed on the loan before the offset account is used.
If you’d like more professional advice regarding this matter you can compare mortgage brokers in your area and get in touch with one for help today. Hope this helps!
Cheers,
Reggie