Offset calculator: How to save time and money on your loan | Finder

Offset calculator

Use Finder's offset calculator to see how having an offset account could help you pay less interest and own your home outright sooner.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Money saved in an offset account helps you pay off your home loan faster, by reducing the amount of interest you pay and deploying that money into your loan principal. The more money you put in your offset (and the earlier you put it therei), the more you save.

Use Finder's offset calculator to estimate just how much you might be able to save with an offset account attached to your mortgage. 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 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:

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%. 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 updated regularly
$
years
Name Product Interest Rate (p.a.) Comp. Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
Macquarie Bank Offset Home Loan Package
2.49%
2.76%
$0
$0 p.a.
60%
$593.01
A sharp variable rate with low fees for borrowers with 40% deposits or refinancers with equity in their properties. Refinancers can switch with a convenient digital application.
homeloans.com.au Low Rate Home Loan with Offset
2.24%
2.26%
$0
$0 p.a.
90%
$573.72
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.
CUA Achieve Variable Home Loan
2.35%
2.4%
$600
$0 p.a.
95%
$582.16
Home buyers can get a competitive, low-fee variable rate plus a 100% offset account. Low deposit option available. Eligible new home buyers with low deposits can apply for the First Home Loan Deposit Scheme with this lender and avoid LMI costs. Eligible refinancers can get a $2,000 pre-paid credit card when they switch to CUA.
Bankwest Complete Home Loan Package Variable
2.55%
3.01%
$0
$395 p.a.
80%
$597.7
$2,000 refinance cashback.
Eligible customers who apply to move their home loan to Bankwest by 30 June 2021 can get a $2,000 cashback. To qualify you must refinance a minimum loan amount of $250,000 or more with an LVR of 80% or lower. The loan must be funded by 31 August 2021 (other terms, conditions and exlcusions apply).
homeloans.com.au Low Rate Home Loan with Offset
2.14%
2.16%
$0
$0 p.a.
60%
$566.11
A competitive rate with no application or ongoing fees. This loan is not available for construction.
Newcastle Permanent Building Society Premium Plus Package Home Loan
2.94%
3.34%
$0
$395 p.a.
95%
$628.65
$2,000 refinance cashback
New borrowers or refinancers can get a discounted rate with this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
Suncorp Home Package Plus Fixed
1.89%
2.85%
$0
$0 p.a.
80%
$547.35
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.
homeloans.com.au Low Rate Home Loan with Offset
2.39%
2.41%
$0
$0 p.a.
80%
$585.25
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account. This loan is not available for construction.
Greater Bank Ultimate Home Loan
3.46%
3.88%
$0
$395 p.a.
90%
$671.29
Build your new home with a variable interest rate and enjoy a 100% offset account. 10% deposit option available.
Newcastle Permanent Building Society Premium Plus Package Home Loan
3.77%
4.15%
$0
$395 p.a.
95%
$697.42
$2,000 refinance cashback
No application fee and 100% offset account. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
loading

Compare up to 4 providers

More guides on Finder

Home Loan Offers

Important Information*

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 Privacy & Cookies Policy.

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!

      Cheers,
      Reggie

Go to site