Finder makes money from featured partners, but editorial opinions are our own.

Offset calculator

Use Finder's offset account calculator to see how you could pay less interest and own your home outright sooner, without spending an extra cent.

Avatar

By

Richard Whitten

Updated

Use Finder's offset account calculator to estimate how much you could save with an offset account attached to your mortgage. Money saved in an offset account helps you pay off your home loan faster, by reducing the amount of interest you pay and redirecting that money into your loan principal. The more money you put in your offset (and the earlier you put it there), the more you save.

Learn how it works and compare home loans that come with offset accounts below.

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 less than 1% 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: 2.80%
  • Offset (savings) amount: $25,000
  • Start offset at year: 3
  • Results: You will repay your home loan 13 months early and save $26,711 in interest

The $25,000 savings results in you paying $26,711 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 do home loan offset accounts work?

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.

More offset calculator questions

We've answered a few of the more common questions Australian borrowers ask about offset accounts and our calculator. If you need more help please leave a comment on the page or organise a free chat with a qualified mortgage broker.

How accurate are the calculator results?

The offset calculator results are an estimate of your potential offset savings. The calculator doesn't take into account:

My current loan doesn't have an offset account: How do I get one?

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.

Is a redraw facility just as good as an 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.

What's a partial offset account?

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.

Not the calculator you were looking for?

Compare home loans with 100% offset accounts

{"visibility":"visibilityTable","ctaLabel":"Calculate","tableCode":"SAMPLE_COMPARISON_V2_TEMPLATE","nicheCode":"AUFHL","fields":[{"name":"LOAN_AMOUNT","value":"150000","options":"","label":"Borrowing amount","suffix":"$","useSuffixAsPrefix":true,"useDropDownOption":false,"tooltip":""},{"name":"PERIOD","value":"30","options":"","label":"Period","suffix":"years","useSuffixAsPrefix":true,"useDropDownOption":false,"tooltip":""}]}
1 - 20 of 22
Updated regularly
Name Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Up Home Loan Variable Rate
Principal & Interest10% min. depositOwner-occupierOffset account
Interest Rate
6.15%
Comparison Rate
6.15%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$915
Go to siteMore Info
Up Home Loan Fixed Rate
Principal & Interest 4Y Fixed10% min. depositOwner-occupierOffset account
Interest Rate
6.40%
Comparison Rate
6.24%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$940
Go to siteMore Info
Mortgage House Savvy Saver Home Loan
Principal & InterestOwner-occupierOffset account
Interest Rate
6.24%
Comparison Rate
6.28%
Fees
Application: $600
Ongoing: $0 p.a.
Monthly Payment
$924
Go to siteMore Info
Macquarie Bank Offset Home Loan Package
Principal & Interest20% min. depositInvestmentOffset account
Interest Rate
6.54%
Comparison Rate
6.79%
Fees
Application: $0
Ongoing: $248 p.a.
Monthly Payment
$953
Go to siteMore Info
Mortgage House Maxx Saver Home Loan
Principal & InterestOwner-occupierOffset account
Interest Rate
6.19%
Comparison Rate
6.23%
Fees
Application: $600
Ongoing: $0 p.a.
Monthly Payment
$919
Go to siteMore Info
Up Home Loan Fixed Rate
Principal & Interest 2Y Fixed10% min. depositOwner-occupierOffset account
Interest Rate
6.45%
Comparison Rate
6.21%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$945
Go to siteMore Info
ING Orange Advantage Loan
Principal & Interest20% min. depositOwner-occupierOffset account$150,000 to $500,000
Interest Rate
6.14%
Comparison Rate
6.43%
Fees
Application: $0
Ongoing: $299 p.a.
Monthly Payment
$914
Enquire now
Mortgage House Chameleon Home Loan
Principal & Interest50% min. depositOwner-occupierOffset account
Interest Rate
5.99%
Comparison Rate
6.03%
Fees
Application: $600
Ongoing: $395 p.a.
Monthly Payment
$900
Go to siteMore Info
ING Orange Advantage Loan
Principal & Interest10% min. depositOwner-occupierOffset account$150,000 to $500,000
Interest Rate
6.44%
Comparison Rate
6.72%
Fees
Application: $0
Ongoing: $299 p.a.
Monthly Payment
$944
Enquire now
 An offset account and free ATM access in Australia when you have both a home loan and everyday bank account with ING DIRECT
Macquarie Bank Offset Home Loan Package
Finder AwardPrincipal & Interest20% min. depositOwner-occupierOffset account
Interest Rate
6.30%
Comparison Rate
6.55%
Fees
Application: $0
Ongoing: $248 p.a.
Monthly Payment
$930
Go to siteMore Info
ME Flexible Home Loan With Member Package
Principal & Interest20% min. depositOwner-occupierOffset account$400k up to $699,999
Interest Rate
6.14%
Comparison Rate
6.53%
Fees
Application: $0
Ongoing: $395 p.a.
Monthly Payment
$914
Enquire now
Refinancers can get $2,000 cashback for loans above $400k, or $3,000 cashback for loans above $700k. Other conditions apply.
ING Orange Advantage Loan
Principal & Interest20% min. depositInvestmentOffset account$150,000 to $500,000
Interest Rate
6.34%
Comparison Rate
6.62%
Fees
Application: $0
Ongoing: $299 p.a.
Monthly Payment
$934
Enquire now
Macquarie Bank Offset Home Loan Package
Finder AwardPrincipal & Interest40% min. depositOwner-occupierOffset account
Interest Rate
6.24%
Comparison Rate
6.49%
Fees
Application: $0
Ongoing: $248 p.a.
Monthly Payment
$924
Go to siteMore Info
Easy Street Smart Variable Home Loan
Principal & Interest5% min. depositOwner-occupierOffset account
Interest Rate
6.04%
Comparison Rate
6.09%
Fees
Application: $500
Ongoing: $0 p.a.
Monthly Payment
$905
More Info
The Mutual Home Loan
Principal & InterestInterest only20% min. depositOwner-occupierOffset account
Interest Rate
5.89%
Comparison Rate
5.89%
Fees
Application: $300
Ongoing: $0 p.a.
Monthly Payment
$890
More Info
Adelaide Bank SmartFit Home Loan
Principal & Interest20% min. depositOwner-occupierOffset account
Interest Rate
6.09%
Comparison Rate
6.26%
Fees
Application: $299
Ongoing: $15 p.a.
Monthly Payment
$909
More Info
Easy Street Fixed Home Loan
Finder AwardPrincipal & Interest 1Y Fixed5% min. depositInvestmentOffset account
Interest Rate
6.14%
Comparison Rate
6.15%
Fees
Application: $500
Ongoing: $0 p.a.
Monthly Payment
$914
More Info
Tiimely Own Fixed Rate Home Loan
Finder AwardPrincipal & Interest 1Y Fixed10% min. depositOwner-occupierOffset account
Interest Rate
6.42%
Comparison Rate
6.15%
Fees
Application: $0
Ongoing: $10 p.a.
Monthly Payment
$942
More Info
Suncorp Home Package Plus Fixed
Principal & Interest 2Y Fixed10% min. depositOwner-occupier
Interest Rate
6.64%
Comparison Rate
6.99%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$963
Enquire now
Suncorp Home Package Plus Fixed
Principal & Interest 2Y Fixed20% min. depositOwner-occupier
Interest Rate
6.44%
Comparison Rate
6.64%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$944
Enquire now
loading
Showing 20 of 22 results

More guides on Finder

  • Home Loan rate rise calculator

    Use our simple rate rise calculator to work out how much extra interest you have to pay when interest rates rise.

  • Lenders mortgage insurance (LMI) calculator

    Finder's simple, free LMI calculator can help you estimate your lenders mortgage insurance premiums.
  • Capital gains tax calculator

    Estimate your CGT when selling an investment property or other asset with Finder's simple capital gains tax calculator.

  • Comparison rate calculator

    The comparison rate represents the actual cost of a home loan by taking into account its interest rate and any additional fees charged by the lender.

  • Home equity calculator

    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.
  • Interest-only Home Loan Calculator

    Estimate the cost of your repayments if you only pay the interest portion of your loan with an interest-only mortgage.
  • Calculate how long will it take to pay off my loan?

    Wondering 'how long will it take to pay off my loan?' Use our free calculator to see how long it will take to pay off your mortgage.
  • Lump sum repayment calculator

    Use a lump sum repayment calculator to see how much you can save in interest and fewer mortgage repayments. It's quick, free and easy to use.
  • Home loan extra repayment calculator

    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!

  • Mortgage repayment calculator

    Want to know how to calculate monthly repayments on your new mortgage? In five steps our free home loan repayment calculator crunches the numbers for you.

Find the right home loan now

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

2 Responses

    Default Gravatar
    KereMarch 26, 2019

    If you want to offset your loan, how can you work out the amount you will pay..?

    Reply
      AvatarFinder
      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!

      Cheers,
      Reggie

      Reply
Go to site