Offset calculator

Use Finder's offset calculator to see how an offset account can save you time and interest on your home loan.

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Money saved in an offset account helps you pay off your home loan faster by temporarily reducing your loan principal and thus your interest costs. The more money you put in the offset and the earlier you put it there, the more you save. An offset calculator is a handy tool to help you estimate the benefits of an offset account.

On this page you can use Finder's offset calculator, learn how it works and compare home loans that come with offset accounts.

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, just 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 have never used. You have built up some money in savings and 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 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 $26,711 less in interest costs. That's a saving of $1,711 over the value of the money in the offset. If you add more to the offset account over time this saving will increase.

How do home loan offset accounts work?

A home loan offset account looks 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. Instead you will pay less interest and more off the loan principal, meaning you repay the loan faster. And that saves you in interest costs.

You can withdraw and spend the money in your offset account if you need to. This will reduce the amount of interest you save, 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:

  • Changes to your interest rate
  • If you add or withdraw money from your offset account
  • Any ongoing fees or other loan costs

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

Not every home loan has an offset account. It's something of a premium loan feature. Many basic variable loans and fixed rate loans don't come with offsets.

If your loan doesn't have an offset account but you really want one then 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 (hopefully with a lower interest rate) and a 100% offset account. Then you will need to apply for the new loan. Once 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 inferior 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 it is allowing you to access some of it.

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%. In other words, every dollar you save 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.

Compare home loans with 100% offset accounts

Data indicated here is updated regularly
Name Product Interest Rate (p.a.) Comp. Rate^ Application Fee Ongoing Fees Max LVR Monthly Payment
Macquarie Bank Offset Home Loan Package
$0 p.a.
A sharp variable rate with low fees for borrowers with 40% deposits or refinancers with equity in their properties. Low Rate Home Loan with Offset
$0 p.a.
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments. This loan is not available for construction.
ING Orange Advantage Loan
$299 p.a.
Get a 100% offset account and rate discounts for higher borrowing amounts. Low Rate Home Loan with Offset
$0 p.a.
A competitive rate with no application or ongoing fee. This loan is not available for construction.
ING Orange Advantage Loan
$299 p.a.
Investors can enjoy a 100% offset account, a redraw facility and flexible repayments.
Well Home Loans Balanced Fixed Home Loan
$0 p.a.
A low 3 year fixed rate for home buyers. Add a 100% offset account with a $10 monthly fee. Not available for construction purposes.
Suncorp Home Package Plus Fixed
$0 p.a.
Lock in a low fixed rate loan for two years and get the annual package fee waived in the first year. Available for borrowers with 20% deposits.
ING Orange Advantage Loan
$299 p.a.
Get a 100% offset account and a competitive, variable interest rate, plus no application fee.
Greater Bank Ultimate Home Loan
$395 p.a.
Build your new home with a variable interest rate and enjoy a 100% offset account. 10% deposit option available.
ING Orange Advantage Loan
$299 p.a.
An offset account and free ATM access in Australia when you have both a home loan and everyday bank account with ING DIRECT

Compare up to 4 providers

More guides on Finder

Home Loan Offers

Important Information*
Logo for Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)

Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.

Logo for St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)

Up to $4,000 refinance cashback. With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up $4,000 cashback and borrow up to 90% of the property's value. (Terms, conditions & exclusions apply).

Logo for Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.

Logo for Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)

Get a competitive variable interest rate with no application fee or ongoing fees.

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2 Responses

    Default Gravatar
    KereMarch 26, 2019

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

      Avatarfinder Customer Care
      JohnMarch 27, 2019Staff

      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!


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