About the Mortgage Offset Calculator
An offset account is an everyday transaction account linked to your home loan. The bank charges interest only on the loan balance minus whatever sits in the offset account, so every dollar parked there works like an extra repayment — without actually reducing your available cash. This calculator compares your loan with and without an offset balance, using the same fixed monthly repayment in both cases, and shows how much interest you'd save and how much sooner the loan would be paid off.
How it works
The monthly repayment is calculated the standard way from your loan amount, rate and term. Without an offset, interest each month is charged on the full remaining balance. With an offset, interest is charged only on (remaining balance − offset balance), so more of each repayment goes to principal and the loan clears faster. Interest saved is the difference in total interest paid between the two scenarios, and time saved is how many fewer months it takes to reach zero balance.
Assumptions and behaviour
- The repayment amount stays fixed at the standard principal-and-interest amount calculated on the original loan, term and rate.
- The offset balance is assumed constant for the life of the loan — it doesn't model you adding to or drawing down your offset account over time.
- Interest is compounded monthly on the offset-adjusted balance, which is how most Australian variable-rate home loans work in practice.
- Rate is assumed fixed for the full comparison; real variable rates move over time.
Limitations
- Doesn't account for a changing offset balance — if your savings grow or shrink over the loan's life, actual savings will differ.
- Doesn't model rate changes, fees, or redraw.
- This is an estimate for planning, not a bank's official amortisation schedule — always confirm figures with your lender before making decisions.
Privacy
The calculation runs entirely in your browser. Nothing is uploaded or stored.
Get FreeMyTask as an app