The calculation
Enter your loan and the balance you typically keep beside it. The result shows the interest saved, how much earlier the loan finishes, and what the first month alone is worth. Nothing leaves your browser.
What typically sits there, not what lands on payday.
Worked out in your browser. Nothing is sent to us and nothing is stored.
Fill in all four fields to see what the offset saves you in interest, and how much earlier the loan finishes.
The arithmetic
The balance in an offset account reduces the amount of the loan that is charged interest.1 So the calculator runs your loan twice with the same repayment: once charging interest on the full balance, and once charging it on the balance less your offset. The difference between the two is the saving.
Because the repayment is held constant, the second run pays down principal faster and reaches zero sooner. That is where the years come from. You are not paying more, you are paying less interest on the same schedule.
1 Moneysmart (ASIC), Mortgage offset accounts, retrieved 28 July 2026.
What it assumes
Every offset calculator makes the same three assumptions. Most do not tell you, which is how a headline saving of $94,000 ends up on a page about an account holding $8,000.
None of that makes the tool useless. It makes it a comparison rather than a forecast, which is the only thing a calculator like this was ever able to be.
How much
There is no cap and no sweet spot. Every dollar in the offset saves interest at your home loan rate for as long as it sits there, so the honest answer is as much as you can leave alone. The useful question is which money belongs there rather than somewhere else.
Against extra repayments
Both reduce the interest you are charged by roughly the same amount, because both reduce the balance interest is calculated on. The difference is what happens when you want the money back.
So paying extra onto the loan is the cheaper of the two, and the offset is the more flexible. If the money is genuinely spare and you will never want it back, extra repayments avoid the package fee entirely. If there is any chance you will need it, the offset is worth the fee for keeping the decision in your hands rather than your lender's.
The fee test
Offsets almost always live inside a packaged loan with an annual fee. Commonwealth Bank's Home Loan Wealth Package, for instance, carries a non-refundable annual fee of $395 payable in advance.2 The offset has to save more than that before it has done anything for you.
The test is one multiplication: average balance times interest rate. At 6%, an average balance of $6,600 saves about $396 a year, which is roughly break even against that fee. Below it you are paying for a feature that is costing you money.
If the answer comes out negative, the fix is not always to drop the offset. Sometimes the package fee is buying a rate discount worth more than the offset, and sometimes the whole package is simply uncompetitive. Working out which is the job of a proper loan review, and what an offset account is covers the product itself in more detail.
2 Commonwealth Bank, Home Loan Wealth Package, fee current as at 26 July 2026.
Questions
Your average balance, not your peak. An offset saves interest on whatever is sitting there each day, so an account that holds $30,000 for two days a month and $2,000 for the rest behaves much more like the smaller figure. If you are not sure, look at your last three months and take the middle.
Because that is the point. The offset reduces the interest charged, not the repayment scheduled. The same repayment now contains less interest and more principal, so the balance falls faster and the loan finishes early. If you asked your lender to reduce the repayment instead, you would keep the cash flow and lose most of the benefit.
No, and no calculator honestly can. It holds the rate flat for the life of the loan because nobody knows the next twenty five years of RBA decisions. Treat the result as a comparison between two versions of the same future rather than a prediction of what you will actually pay.
The interest saving is very similar, but the access is not. Money in an offset stays yours to withdraw at any time. Money paid onto the loan has to be redrawn, which depends on your lender's redraw terms. The offset costs you a package fee for that flexibility, so the choice is really about whether you need the money back.
Sources
Market figures are point in time published figures, checked each time this page is reviewed.
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