Offset account calculator
Model regular offset deposits, extra repayments and the path to payoff. Enter your details for an instant estimate.
The calculation
Two scenarios, one starting loan
The baseline charges interest on the outstanding loan and uses the scheduled principal-and-interest repayment. Your scenario charges interest on the loan less the offset, with a minimum interest-bearing balance of zero. It then adds any extra repayment and the net monthly offset contribution you enter.
The difference in total interest includes the effect of both the offset and extra repayments. To isolate the offset, leave extra repayments at zero. To compare another saving habit, change one input and calculate again.
Moneysmart explains how an offset reduces the balance charged interest.
Read the model
The assumptions behind the result
- Interest is approximated monthly at the annual rate divided by twelve. Actual home-loan interest commonly uses daily balances.
- The rate is constant, the offset is 100%, and no fees, withdrawals or future rate changes are included.
- Repayments and net offset deposits happen at month end. New deposits reduce interest from the next modelled month.
- Scheduled and extra repayments come from outside the offset account. The offset is never automatically used to clear the loan.
- Money above the loan balance provides no additional offset interest saving.
See the formulas and calculation limits. A scenario is not a forecast of what your lender will charge.
A simple example
Why the repayment can stay the same
Take an illustrative $500,000 loan at 6% with $20,000 in a full offset. In a simplified monthly calculation, interest falls from $2,500 to $2,400. If the scheduled repayment is unchanged, that $100 difference reduces principal instead. The offset has helped even when the direct debit looks the same.
Whether a lender changes your required repayment depends on the loan terms. Read the repayment explanation or check your offset link and statement.
The next decision
Do the savings justify the loan’s costs?
This calculator compares one loan with and without offset funds. It does not compare a lower-rate basic loan against a more expensive offset loan. For that decision, the difference in interest rates and annual fees matters as well as the offset balance.
Compare the two offers and find the break-even offset balance. If you are deciding where to keep spare cash, compare access through offset and redraw. Check account conditions before relying on either for money you may need soon.
Common questions.
What offset balance should I enter?
Enter the balance you expect to keep in the offset at the start. With no regular deposits, it stays constant in the model. If everyday spending makes it fluctuate, try a conservative average instead. The tool does not model individual daily transactions.
Why are fully offset and paid off different dates?
A fully offset loan still has an outstanding debt, but offset cash covers that balance for interest purposes. In this model the cash stays separate and repayments continue until the loan balance reaches zero. Ask your lender about the terms that apply to your account.
Can I model extra repayments as well as offset savings?
Yes. Open the regular savings section and enter each separately. Repayments are assumed to come from outside the offset. Enter only the net additional money retained in the offset so the same cash is not counted twice.
Does the result include fees or rate changes?
No. The rate is constant and fees are excluded. Use the offset worth-it tool to compare the annual rate and fee differences between two loan offers.
Sources & content review
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