Offset accounts

Home loan offset calculator

See how much interest you could save, and how much sooner you could pay off your home loan, by keeping a steady balance in an offset account.

What it shows

What your savings could be doing.

Interest saved

How much less interest you'd pay over the life of the loan with your offset balance working against it.

Time saved

How much sooner you could own your home if your repayments stay the same and the offset reduces the interest.

A steady balance

A constant balance shows the effect clearly. In real life, your pay coming in and bills going out keep it moving.

How offset works

Every dollar in offset is a dollar you don't pay interest on.

An offset account is a transaction or savings account linked to your home loan, and its balance is subtracted from the loan before interest is worked out. It's one of the features we compare when choosing a home loan.

A simple example

With a $600,000 loan and $50,000 in a 100% offset account, you're charged interest as if you owed $550,000. Your repayments usually stay the same, so more of each one goes to the principal.

Offset or extra repayments?

Both reduce interest by the same amount. Offset keeps your money accessible, while extra repayments go into the loan and are usually available through redraw, which lenders can restrict. If flexibility matters, offset tends to suit.

Check the costs

Offset accounts are most common on variable loans and often come with a package fee or a slightly higher rate. With a small balance, the fee can outweigh the saving, so it's worth running the numbers.

Partial and multiple offsets

Some lenders only offset part of the balance, and some let you link several accounts to one loan. A 100% offset gives you the full benefit.

Offset questions

How to make your savings work harder.

What people ask us most about offset accounts. Got another? Book a chat.

How does an offset account work?

Your offset balance is deducted from your home loan balance when interest is calculated, so you're only charged interest on the difference. Your money stays available to use whenever you need it.

Is an offset account worth it?

It's usually worth it if you can keep a meaningful balance in the account, such as your savings or an emergency fund. If your balance is small, a package fee or higher rate may cancel out the benefit.

Can I have an offset account on a fixed rate loan?

Some lenders offer full or partial offset on fixed loans, but it's far more common on variable rates. Many people split their loan so part is fixed and part is variable with an offset.

Does money in an offset account earn interest?

No. Instead of earning interest, it reduces the interest you pay on your home loan. Because that's a saving rather than income, it isn't taxed the way interest from a savings account is.

What's the difference between offset and redraw?

An offset account is separate from your loan, so the money is never part of the loan balance. With redraw, extra repayments go into the loan and you take them back out later, subject to the lender's terms. Offset is usually more flexible.

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