Offset account calculator
See how much interest the savings you keep in an offset account quietly save you — each month and across a year.
How an offset account works
An offset account is an everyday transaction account linked to your loan. Its balance is netted off your loan balance before interest is calculated — so $20,000 in offset on a $500,000 loan means you're only charged interest on $480,000.
You keep full access to the money, unlike extra repayments you'd have to redraw. That makes an offset a flexible way to cut interest while keeping a cash buffer.
Offset vs paying down the loan
Dollar for dollar, money in an offset saves the same interest as paying down the loan — but stays available if you need it. The trade-off is discipline: an offset only helps while the balance sits there.
The interest you save is effectively a tax-free return equal to your loan rate, which is why a healthy offset balance can shorten the loan by years.
Offset accounts — common questions
How much does an offset account save?
You save interest on whatever sits in the offset, at your loan’s interest rate, for as long as it’s there. On a typical loan a steady five-figure offset balance can save tens of thousands over the term and bring the payoff date forward. Enter your numbers above for your specific figure.
Is an offset account better than extra repayments?
They save the same interest dollar for dollar, but an offset keeps the money accessible while extra repayments lock it into the loan (you’d need redraw to get it back). An offset suits people who want a cash buffer; extra repayments suit people who want the money gone for good.
Does a 100% offset account reduce all my interest?
A full (100%) offset reduces the interest-bearing balance by your entire offset amount. Some lenders offer only partial offsets, and offset loans can carry higher rates or fees — so compare the total cost, not just the headline rate.
Is this offset calculator accurate?
It’s an educational estimate assuming a constant rate and a steady offset balance. Your real saving depends on rate changes, how your balance fluctuates, and your loan’s fees. Confirm specifics with your lender. This is not financial advice.
Buying with someone else?
Propact tracks who paid what, splits the mortgage, and works out a fair buyout — from settlement to the day someone exits.
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